Pharmabiz
 

Sanofi-aventis makes $18.5 billon offer to acquire Genzyme

Paris, FranceMonday, August 30, 2010, 08:00 Hrs  [IST]

Sanofi-aventis announced that it has submitted a non-binding proposal to acquire Genzyme in an all-cash transaction valued at approximately $18.5 billion. Under the terms of the proposed acquisition, Genzyme shareholders would receive $69 per Genzyme share in cash, representing a 38 per cent premium over Genzyme's unaffected share price of $49.86 on July 1, 2010. Sanofi-aventis' offer also represents a premium of almost 31 per cent over the one-month historical average share price through July 22, 2010, the day prior to press speculation that sanofi-aventis had made an approach to acquire Genzyme. Based on analyst consensus estimates, the offer represents a multiple of 36 times Genzyme's 2010 earnings per share and 20 times 2011 earnings per share. Accordingly, the offer price takes into account the upside potential of the anticipated recovery in Genzyme's performance in 2011. Sanofi-aventis has secured financing for its offer. The non-binding offer, which was made on July 29, 2010, was reiterated in a letter sent today to Genzyme's chairman, president and chief executive officer, Henri A. Termeer, after several unsuccessful attempts to engage Genzyme's management in discussions. Sanofi-aventis is disclosing the contents of its letter in order to inform Genzyme's shareholders of the significant shareholder value and compelling strategic fit inherent in a combination of the two companies. Genzyme is a leading bio-pharmaceutical company based in Cambridge, Massachusetts. Its products address rare diseases, kidney disease, orthopaedics, cancer, transplant and immune diseases, and diagnostic testing. Sanofi-aventis' global reach and significant resources would allow Genzyme to accelerate investment in new treatments, enhance penetration in existing markets and expand further into emerging markets. The combination of both companies would create a global leader in developing and providing novel treatments, giving both companies significant new growth opportunities. "A combination with Genzyme represents a compelling opportunity for both companies and our respective shareholders and is consistent with our sustainable growth strategy," said Christopher A.Viehbacher, chief executive officer of sanofi-aventis. "Sanofi-aventis shares Genzyme's commitment to improving the lives of patients, and our global reach and resources can help the company better navigate the issues it faces today. The all-cash offer provides immediate and certain value for Genzyme shareholders at a substantial premium that recognizes the company's upside potential, while sanofi-aventis shareholders would benefit from the accretion and the attractive growth prospects of this combination. Now is the right time for Genzyme to consider a transaction that maximizes value for its shareholders. Sanofi-aventis believes strongly in this acquisition and its strategic and financial benefits. We remain focused on entering into constructive discussions with Genzyme in order to complete this transaction." Sanofi-aventis has a strong track record of successfully acquiring and integrating a diverse range of businesses and has consistently demonstrated its commitment to allow affiliates to focus on their core competencies. Sanofi-aventis intends to make Genzyme its global centre for excellence in rare diseases and further increase sanofi-aventis's presence in the greater Boston area. At this stage, there can be no assurance that any agreement could be reached between the two companies. Sanofi-aventis is prepared to consider all alternatives to successfully complete this transaction.

 
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