Sanofi – Genzyme: showdown on the price
Posted by admin on August 24th, 2010Radio Silence. Since the leaks to the press last July that Sanofi-Aventis has made an initial offer of $ 69 per share or 18.4 billion dollars, the pharmaceutical company and the American biotechnology company, Genzyme, have decided to no longer communicate on the subject. On the occasion of the publication of the results of the group in late July, the CEO of Sanofi-Aventis, Chris Viehbacher, confirmed to Le Figaro that the group will continue its acquisition policy. "We will continue to make acquisitions. We work on small and medium-sized operations. Small can be up to 5 billion dollars. The averages may reach twenty billion dollars. However, we do not want mega-mergers. ".
Between $ 75 and $ 80
A silence that analysts interpret as the beginning of discussions between the two parties.And, according to The Wall Street Journal, these negotiations have started badly. While Sanofi encamp on his positions, namely an initial offer of 69 dollars per share, the leaders of Genzyme seller would not be below 80 dollars. "I do not see Sanofi pay more than $ 80. However, the shareholders present capital of Genzyme – Relational and Carl Icahn – will not accept offers of less than 75 dollars, "said HervĂ© Manign, specializing in mergers and acquisitions. If Sanofi-Aventis declined to specify the amount of the envelope before it, the analysts amounting around 20 billion euros. The group comes easily to renegotiate a credit line of $ 7 billion to 2015.
"Sanofi is not obliged to do this operation"
If both parties wish that the discussions continue, they must s'entendrent on the initial offer."Genzyme is a very tempting prey for Sanofi, because it would allow him to catch up on organic products, which have the advantage of being more difficult to generics, said Herve Mangin. But Sanofi is not obliged to do this. On the one hand, an acquisition too expensive tarnish the good investments made by Chris Viehbacher since his arrival at the head of the group. On the other hand, it would force the group to increase its capital, which would reduce the value of the transaction.
A month ago, Sanofi-Aventis published in the second quarter sales up 4.6% to 7.8 billion euros, but down 1.2% at constant exchange rates. Net income from operations rose 7.6% to 2.5 billion (+4.5% at constant exchange rates).If the activity is driven by emerging markets (+19.4% organic growth for the half year), sales in Europe and the United States will continue to decline with further loss of patents, but after 2013 the group remains confident with the launch of new products. Sanofi-Aventis development Jevtana particularly in the treatment of prostate cancer has just been approved in the United States, and iniparib (BS1201) in the treatment of breast cancer.
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