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Biotechnology industries

Novartis Considers Bid for Aventis in Fight Against Sanofi

Strategic Insights

— 1 min read

A potential tie-up between Novartis AG and Aventis SA could create a pharmaceutical giant, rivaling Pfizer and GlaxoSmithKline in global sales. Novartis, Switzerland's largest pharmaceutical company, has expressed interest in Aventis, citing complementarity in cancer, diabetes, and cardiovascular treatments. This move comes as Aventis faces a hostile bid from Paris-based Sanofi-Synthelabo SA, which Aventis has described as too low.

Key Takeaways:

  • Novartis AG, Switzerland's largest pharmaceutical company, is considering a bid for Aventis SA to prevent a hostile takeover by Paris-based Sanofi-Synthelabo SA.
  • A potential tie-up between Novartis and Aventis would create a global pharmaceutical giant, with annual sales of $24.9 billion and profit of $5 billion, employing 78,000 people in 140 countries.
  • Aventis has annual sales of $16.8 billion and employs 69,000 people, and a merger with Novartis would create cost savings of $3.2 billion by 2006, estimated by analyst Oliver Kaemmerer.
  • The European Commission is set to announce its preliminary findings on the potential consequences of a Sanofi-Aventis takeover by April 15, which could lead to an antitrust inquiry.
  • Novartis CEO Daniel Vasella acknowledged the potential synergy between the two companies, citing strong complementarity in treatments for cancer, diabetes, and cardiovascular problems.

Statistics:

  • Novartis AG has annual sales of $24.9 billion.
  • Novartis AG has a profit of $5 billion.
  • Aventis SA has annual sales of $16.8 billion.
  • The cost savings from a potential Novartis-Aventis tie-up would be $3.2 billion by 2006, estimated by Oliver Kaemmerer.
  • A Sanofi-Synthelabo SA bid for Aventis would have to be at a premium of at least 5% to the current offer of $58.75 per Aventis share.
  • Aventis shares surged 3.2% to $64.45 on March 12, while Sanofi shares added 2.7% to $56.70.
  • Novartis shares fell 1.5% to Sfr53.5 on March 12.

Sources:

  • "Novartis Considers Bid for Aventis in Fight Against Sanofi," Reuters, March 12.
  • "Aventis Shares Surge on News of Potential Novartis Bid," Bloomberg, March 12.
  • "Sanofi-Synthelabo's Bid for Aventis Raises Competition Concerns," The Wall Street Journal, March 11.
  • "Novartis and Aventis in Talks on Possible Merger," Le Figaro, March 8.

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