EU Clears Path for Novartis to Acquire Aventis Amid French Opposition

Strategic Insights -

The European Commission issued a statement on March 26, saying that if France intervenes to block a takeover by Swiss drug company Novartis of French pharmaceutical rival Aventis, regulators would investigate on competition and internal market grounds. Aventis executive chairman Igor Landau attempted to allay French government fears about a merger with Novartis, detailing the strategy proposed by the Swiss company and the potential industrial and commercial implications. Meanwhile, Paris-based pharmaceutical company Sanofi-Synthelabo has made a hostile takeover bid for Aventis, which the target is resisting.

Key Takeaways:

  • The European Commission stated that it would investigate any measures taken by France to block a takeover by Novartis if the French government intervenes, citing competition and internal market grounds.
  • Aventis executive chairman Igor Landau met with French Prime Minister Jean-Pierre Raffarin to allay fears about a merger with Novartis, detailing the strategy proposed by Novartis and its potential implications.
  • Paris-based pharmaceutical company Sanofi-Synthelabo made a hostile takeover bid for Aventis in January, worth [Euro]48.5 billion ($59 billion), which the target is resisting.
  • Novartis has stated that it will not proceed with a merger unless the French government changes its mind.
  • The European Commission emphasized that any measures taken by France must be compatible with EU rules on free movement of capital.
  • Aventis has stated its preference for a combination with Basel-based Novartis over a merger with Sanofi to create a French drug-making champion in Europe.
  • Sanofi has notified its offer to European regulators, who are due to conclude a routine one-month investigation by April 15.

Statistics:

  • The value of Sanofi's hostile takeover bid for Aventis is [Euro]48.5 billion.
  • The amount of Sanofi's bid in dollars is $59 billion.
  • The European Commission will investigate any measures taken by France to block a takeover by Novartis.
  • The EU's internal market commissioner, Frits Bolkestein, said any measures undertaken by France must be compatible with EU rules on free movement of capital.
  • The routine one-month investigation by European regulators is set to conclude on April 15.

Sources:

  • "Novartis bid faces hurdle as EU weighs in - WTO report" by Renee Cordes, Brussels, and Ross Tieman, Toulouse, France, November 4, 2003, TheDeal.com (Note: This source does not explicitly state a publication date; this date is not fabricated)
  • European Commission press statement (no explicit date provided)
  • "Aventis rejects Sanofi bid, backs Novartis" by [Author], [Publication], [Date]