Sanofi-Synthelabo and Aventis: The Birth of a National Champion (A)

Abstract

It was late on Thursday, April 22, 2004, and Jean-Francois Dehecq, the Chief Executive Officer (CEO) of Sanofi-Synthelabo (Sanofi), France's second largest pharmaceutical company, was sitting in his office thinking about what had happened over the last three months. On January 26, 2004, he had launched a hostile tender offer to acquire Aventis, France's largest pharmaceutical company. The merger between Sanofi and Aventis would have created the world's third largest pharmaceutical company, closing the gap with U.S.-based Pfizer and U.K.-based GlaxoSmith-Kline (GSK). Jean-Francois Dehecq had offered £á48.6 billion, but his offer had been rejected by Aventis's Supervisory Board. Since the end of January, Aventis had been fighting back, launching a poison pill and inviting Novartis, Switzerland's largest pharmaceutical company, to act as a white knight.

Teaching

This case can be used in a class in corporate finance or in mergers and acquisitions (M&As). It is intended to provide a debate over the following issues: (1) the pros and cons of a merger between Sanofi and Aventis; (2) the French government's interference with the business world in general and with the merger between Sanofi and Aventis in particular; (3) Aventis's defense against the hostile tender offer and in the use of a poison pill (the Plavix warrants) and the search for a white knight (Novartis); and (4) Aventis's valuation with two categories of valuation methods: the discounted cash flows (DCF) method (the weighted average cost of capital (WACC) method), and the comparable method (multiples).

Case number:

A06-05-0014

Subject:

Finance

Year:

2005

Setting:

France

Length:

27 pages

Source:

Library

Sanofi-Synthelabo and Aventis: The Birth of a National Champion (A)

Degrees

Executive Education

Lifelong Learning

Employers and Partners

Alumni