Aventis Pharma AG's plans of launching innovative products in India or outsourcing some of its key products like Daonil from its Indian subsidiary Aventis India would now depend on the strategy of the new company Sanofi-Aventis, likely to be formed by December 2004.
Aventis AG had earlier announced its decision to outsource key products like Daonil from India. Also, unlike its other MNC counterparts, Aventis had initiated launching its under patent innovative products like Arava, and Amaryl, much in advance from 2005 deadline. "Sanofi does not seems to be as generous as Aventis in terms of new product launches or product outsourcing. Sanofi board members may put brakes on this strategy of Aventis, which might affect its product launches and outsourcing from India," said sources.
Following the approval for the acquisition of Aventis by Sanofi Synthelabo by the respective boards, the global merger of both companies is likely to take place by December 2004, subsequent to their shareholders approval.
One of the key impediments in the process would be on the listing of the shares of the new company around the stock exchanges of the world. This is because, Aventis' shares are listed in stock exchanges across the globe and Sanofi is a meagerly listed company. Again, Sanofi will have a greater say in the decision whether to list along with Aventis or get Aventis delisted after a favorable buyback around the world, said analysts.
"If the board decides to list the new company, most probably it would take the route of listing along with Aventis. For that, it will have to undergo a lot of regulatory and listing procedures in markets wherever Aventis is listed," said sources. There is also an option of getting listed wherever the markets hold potential and delist from non-performing markets.
In India too, Aventis is a listed company with daily market capitalization averaging close to Rs. 2,000 crore at the Bombay Stock Exchange and Sanofi Synthelabo India is an unlisted company. "Considering the huge market capitalization of Aventis India, chances of its shares getting delisted are rare. Sanofi India instead would prefer to get listed along with Aventis India and share the capitalization," said a Mumbai-based equity investment advisor for FIIs.
Sanofi Synthelabo India is a 100 per cent subsidiary of its parent formed after the buy out of 50 per cent stake from Torrent India. Earlier the company was called Sanofi Torrent India Ltd. Cardiovascular, neurology, internal medicine and oncology are some of the specialties of the company. Sanofi Synthelabo India achieved sales of Rs. 85 crore during last year.
The parent has more than 30,000 employees in over 100 countries. With an R&D expenditure of more than EUR 1 billion, and more than 6,000 scientific and support staff, the company has 48 compounds in development, 20 of which are in Phase II and III of clinical investigation.
Aventis India achieved a turnover of Rs. 651.6 crore and a PAT of Rs. 91.6 crore, last year. The shares of the company are traded at around Rs. 780 at the Bombay Stock Exchange.
Pharmaceutical analysts expect the operational merger of the companies in India to take place six months after the global merger. "As either companies do not have liabilities like excessive man power or surplus assets, merger process should not take as much time as the merger of GSK and Burroughs Wellcome," said Shahina Mukadam, a pharma analyst at Mumbai-based HDFC Securities.