Aventis had been scathing about Sanofi's original offer for the company, but warmed to an improved offer from Sanofi that also gives Aventis officers more representation on the combined company board.
This improved offer would value one Aventis share at €68.93 based on Sanofi's share price prior to the launch of their initial offer on January 26, 2004, which valued Aventis at €60.43 per share. The improved offer values Aventis in total at €55.3 billion, compared to €48.5 billion.
Aventis said that it believed the new offer was in line with other possible transactions, and took into account its growth potential. Earlier, the company had said that Sanofi's offer undervalued the firm, a view helped by the approval last week of Apidra (insulin glulisine), a rapid-acting insulin analogue for patients with diabetes.
Novartis said yesterday it decided to discontinue negotiations and not submit a bid for a potential combination of Aventis and Novartis' businesses.
The company had earlier expressed its interest in a merger with Aventis but had been reluctant to pursue it in the face of fierce opposition from the French government, which feared it could lose its position as a pharmaceutical player in the world market if Sanofi and Aventis joined with third parties.
"Following Aventis' decision to engage in discussions with Sanofi, at the strong intervention of the French Government, Novartis decided not to proceed, said the Swiss company in a statement.
Sanofi's interest in an Aventis merger is seen as defensive move to ward off possible predation by the larger pharmaceutical multinationals, such as GlaxoSmithKline or Pfizer. The new company will be ranked third in the world behind these two giants.