French drug giant Sanofi-Aventis publicly launched its $18.5 billion cash bid for American biotech firm Genzyme Corp. today, the Associated Press reports.
It's a move that follows months of rumored interest and failed attempts to bring Genzyme's management to the table.
Under terms of the proposed acquisition, Genzyme shareholders would receive $69 per share, representing a 38 percent premium over Genzyme's closing stock price of $49.86 on July 1. That's the day before speculation began to swirl that Sanofi was looking to buy an American drugmaker, possibly Genzyme, in a bid to help replace revenue being lost to worsening generic competition.
Sanofi-Aventis is taking the bid public after what it calls “several unsuccessful attempts” to engage Genzyme's management in talks. While it prefers to work with the board instead of taking the offer directly to shareholders, CEO Christopher A. Viehbacher said on a conference call this morning that “we are also prepared to consider all alternatives to complete this transaction.”
“Sanofi-Aventis believes strongly in this acquisition and its strategic and financial benefits,” Viehbacher said. “We remain focused on entering into constructive discussions with Genzyme in order to complete this transaction.”
Viehbacher, who previously was GlaxoSmithKline's top executive in Research Triangle Park, left GSK after he was passed over for the British drugmaker’s CEO spot. Viehbacher still has other local ties, including a home in Raleigh. In December, he stopped by Chapel Hill to announce that Paris-based Sanofi would give $2 million to support cancer research at the N.C. Cancer Hospital on the campus of UNC-Chapel Hill.
The bid for Cambridge, Mass.-based Genzyme is in line with Sanofi's strategy to seek future growth by diversifying.
Since Viehbacher defected from rival GSK and took the top spot at Sanofi-Aventis in December 2008, the company has completed about 50 generally small- to mid-sized acquisitions and partnerships. Analysts have said buying Genzyme would boost Sanofi-Aventis' earnings, help it rebuild its drug development pipeline and speed up its transition to more sustainable growth, the analysts said.
By 2013, Sanofi-Aventis aims to be less dependent on aging patent-protected blockbusters like Plavix and Lovenox, as the company leans more heavily on six markets where it sees the most growth: vaccines, diabetes products, over-the-counter medicines, new treatments and emerging markets as well as the Japanese market.
The takeover effort also would be the latest deal in a series of mergers that are consolidating the pharmaceutical industry, including Pfizer’s acquisition of Wyeth and Merck’s purchase of Schering-Plough.
The Associated Press and Bloomberg News contributed to this report.