Sanofi-Aventis likely to buy Genzyme for $19 bn : report
Press Trust of India / New York Jul 29, 2010, 13:29 IST
French drug maker Sanofi-Aventis is likely to make a formal offer to acquire US-based biotech company Genzyme for $19 billion, says a media report.
Attributing the development to people familiar with the matter, The New York Times reported that Sanofi board agreed to let management make a formal proposal.
Sanofi-Aventis, has significant presence in India and employs over 1,800 people in the country.
The company may make an offer of up to $70 a share for Genzyme, which would value US-based company's equity at about $18.6 billion, the report noted.
According to the publication, Sanofi would likely issue a bear hug letter that would outline its proposed bid. Such a letter is friendly on its surface, but signals a willingness to go hostile if necessary.
The report said that the move could put pressure on Genzyme's directors, some of whom have been more receptive to Sanofi's informal approach than others. A bear hug letter could also rally Genzyme shareholders.
Genzyme's shares have climbed about 26 percent since reports surfaced last Friday of Sanofi's approach.
Sanofi approached Genzyme earlier this year about a potential combination, one that would bolster Sanofi's drug pipeline and significantly increase its presence in bio-pharmaceuticals.
If Sanofi continues to pursue Genzyme, it will need to deal with two formidable activist investors Carl C Icahn and Ralph Whitworth, who hold stakes in the biotech company and have representatives on the Genzyme board. Both have pushed Genzyme to take steps to increase its stock price, the report added.
Last year, Sanofi-Aventis announced a bid to acquire 80 per cent stake in Hyderbad-based Shantha Biotechnics for $784 million.
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