French pharmaceutical giant Sanofi-Aventis has launched a hostile bid to acquire Genzyme, a US-based manufacturer of drugs for rare diseases. The deal is estimated at $18.5 billion.
The bid, which is priced at $69 per share, was launched a month after Genzyme snubbed a direct acquisition quote at the same price. Sanofi has not deterred since that rebuff as it has decided to approach the investors directly.
The unsolicited offer, which is made all in cash, will expire on December 10 at 11:59 pm EST.
"We believe the offer will be successful ultimately," Sanofi Chief Executive Chris Viehbacher said in a conference call.
Viehbacher wants a surge in profits at Sanofi as the company's drug portfolio has seen a decline in recent years due to rising competition. He said that he started the tender offer after Genzyme's top management refused to enter discussions. He met with the CEO of Genzyme, Henri Termeer, on September 20, but has said that the talks were "unproductive".
Genzyme shareholders, who own more than 50 percent of the group, have entered into discussions with Viehbacher with some reports suggesting that they have welcomed the move. There have been recent manufacturing problems at the company that have stirred interest in Genzyme shareholders, according to Viehbacher.
Experts say that Viehbacher may have to up the acquisition price in order to win the Genzyme shareholders. Genzyme has been embroiled in legal battles and has a sizable number of activist investors, factors that Viehbacher thinks will count in his favor.
