Aventis Takeover Battle Takes a Fresh Turn as Novartis Enters the Scene

Strategic Insights -

The potential takeover battle for pharmaceuticals group Aventis SA has taken a significant turn with Novartis AG agreeing to open talks with Aventis about a potential business combination. This move aims to save Aventis from a hostile cash-and-shares takeover bid by Paris-based rival Sanofi SynthElabo SA. Shares in Aventis rose 4.5% to €65.55, while Novartis shares fell 2.9% to 55.70 Swiss francs ($42.38).

Key Takeaways:

  • Novartis has agreed to open talks with Aventis about a potential business combination, which would save Aventis from a hostile takeover bid by Sanofi SynthElabo SA.
  • Aventis shares rose 4.5% to €65.55, while Novartis shares fell 2.9% to 55.70 Swiss francs ($42.38) following the announcement.
  • Sanofi SynthElabo SA, the rival bidder, posted strong first-quarter sales, rising 18.4% to €2.19 billion from a year earlier.
  • Sanofi's CFO, Marie-Hélène Laimay, stated that the company does not intend to raise its offer for now, but will review its strategy after the AMF's decision on Aventis's warrant plan.
  • Novartis, which had delayed opening formal talks, was cautious about prospects, stating that "no assurances can be given that an agreement can be reached."
  • Aventis CEO Igor Landau held fresh talks with the French industry minister, Patrick Devedjian, to argue the merits of a combination with Novartis.
  • Aventis welcomed the Novartis announcement, stating that the company is "very happy" at this decision.
  • Companies involved: Aventis SA, Novartis AG, Sanofi SynthElabo SA
  • Key stakeholders: Patrick Devedjian, French industry minister; Marie-Hélène Laimay, Sanofi CFO; Igor Landau, Aventis CEO

Statistics:

  • Aventis shares price: €65.55 (up 4.5% from previous close)
  • Novartis shares price: 55.70 Swiss francs ($42.38) (down 2.9% from previous close)
  • Sanofi SynthElabo SA's first-quarter sales: €2.19 billion (up 18.4% from previous year)
  • Novartis sales: $6.6 billion (up 16% from previous quarter)
  • Novartis operating income: $1.5 billion (up 11% from previous quarter)
  • Novartis net income: $1.3 billion (up 22% from previous quarter)
  • Aventis warrant plan: could increase Sanofi's equity by 22% following a takeover
  • AMF decision: expected to be made today regarding Aventis's warrant plan

Sources:

  • [1] "Novartis Agrees to Open Talks with Aventis About Potential Business Combination"

+ Source: Bloomberg, April 22

  • [2] "Aventis SA Avoids Hostile Bid as Novartis Enters the Scene"

+ Source: The Wall Street Journal, April 22

  • [3] "Sanofi SynthElabo SA Posts Strong First-Quarter Sales"

+ Source: Reuters, April 22