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Aventis at heart of consolidation rumours

16-Jan-2004

Franco-German drugmaker Aventis has seen its share price leap upwards during the week on a resurgence of speculation that it is in the frame for a major merger or acquisition.

The Sanofi rumours have been prompted largely by the decision of two leading Sanofi investors, the cosmetics giant L'Oreal and oil company Total, not to renew their shareholder agreements in the drug company beyond the end of 2004.

Just a couple of years ago Aventis was regarded as having one of the most promising pipelines in the pharmaceutical industry, but some late-stage product disappointments have left its larder looking a little bare. And both Aventis and Sanofi are facing patent challenges to big-earning cardiovascular drugs.

 

Bringing the two companies together would stock up the pipeline and provide significant opportunities for cost-cutting, said analysts.

 

A merging of the two entities would create one of the largest drugmakers in the world by sales, surpassing the likes of AstraZeneca and GlaxoSmithKline to make a Sanofi/Aventis amalgamation, with an estimated market capitalisation of around $100 billion, the leading drugmaker in Europe and second only in the world to US giant Pfizer.

 

Both Aventis and Sanofi-Synthelabo have denied that any negotiations are underway, while analysts said that the speculation may be a little premature, especially ahead of the resolution of the patent actions.

 

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