Sanofi-Aventis Genzyme wants to win a friendly fashion
August 5, 2010
Sanofi-Aventis should not engage in a battle to win market because Chris Viehbacher Genzyme, its director general, is not customary for this type of attack that the market would not fail to punish.
There is no urgency or need for Sanofi to conduct this transaction at any price, even if it is relevant, especially as other targets could meet the objectives of the sixth largest pharmaceutical company worldwide, analysts say.
For now, Chris Viehbacher convinced his board of directors, which include L'Oreal and Total, which are its largest shareholders, interest redemption of Genzyme to catch up in biotechnology, an area where it accounts for the loss of several of its patents drugs Lovenox and Plavix in head.
This former GlaxoSmithKline, which is as familiar as the finance world of pharmacy and the United States, was authorized to bid on U.S. Biotech.
The aid is declining dollar vis-à-vis the euro might prompt a reevaluation in the range of 75-79 dollars a proposal for 69 euros it has already made.
Faced also with the rise of generics, the other major laboratories might be interested to Genzyme, which in addition to rare genetic diseases, is a leader in innovative treatments for kidney disease and osteoarthritis, cancer, transplants or further surgery.
But it is not certain that these groups are likely to believe that the financial risk taking is justified.
INDUSTRIAL RISK
Among the concerns are the risks of copying which also weigh on certain portfolio Genzyme and especially the production disruptions last year, two major biotech drug, Cerezyme and Fabrazyne, due to problems contamination of its plants.
"There are good chances that Sanofi can conclude this transaction makes sense for both parties," said Marc Booty, an analyst at Pictet Asset Management.
But, said Ben Yeoh, at Atlantic Equities, "if Chris Viehbacher fails to convince management to Genzyme, he will prefer to throw in the towel rather than engaging in a hostile approach may cost him too."
Eric Le Berrigaud, at Raymond James notes on its side that Chris Viehbacher philosophy as expressed in the acquisitions of BiPar, Chattem or Shantah is based on "partnership with the desire to retain the management and work with him .
It is also the view of Delphine Le Louet, Lombard Odier Darier Hentsch & Cie, who observes that "Viehbacher Chris has an excellent history of stock trading without bidding.
"Why should it change?" She asks, noting that "the true value of Genzyme, which last year knows one catastrophe is around $ 50 more than $ 70.
Industrial problems make it "relatively risky" purchase of Genzyme, notes Claude Allary, a consultant at Bionest.He agreed that in this context, the French chose to retire rather than fight to clinch a company with which the synergies are not obvious.
For a friendly approach to succeed, Chris Viehbacher, who has launched no less than 33 partnerships or acquisitions since his arrival at the head of Sanofi in December 2008, Genzyme must be persuaded to form the core of its center for biotechnology.
STRATEGIC CHOICES
The debt level of Sanofi (6.2 billion euros at June 30, 2010) allows it to raise its offer to $ 83 Genzyme, "but is it deserved?" Asked Delphine Le Louet.
For her, the answer depends on the strategic choice "between 'boosters' pharma division or diversify into other businesses such as ophthalmology and / or cosmetology.
The Berrigaud Eric believes that "in case of failure on Genzyme, Sanofi is unlikely to change its strategy of mergers and acquisitions, particularly in terms of size, except to explain that there is an urgency to make a transaction immediately .
Christopher Kummer, director of the IMAA Zurich Institute of mergers and acquisitions, said that Sanofi could just as easily achieve its desire to enrich its product pipeline by buying smaller companies, thereby avoiding battles "with such as professional activists (Carl) Icahn ".
Several businesses are within the framework set by Chris Viehbacher, who has repeatedly said that it was aimed agreements worth up to $ 20 billion.
Among the targets mentioned in recent weeks by analysts include Allergan, eye specialist and manufacturer of the famous anti-wrinkle Botox, and the biotechnology company Biogen.
Other actors such as Bausch & Lomb, the U.S. specialist eye health are also appointed.
If the end of September no formal information is communicated on Genzyme, would mean that Sanofi has thrown in the towel and looks away, said an expert.
On the occasion of the publication of interim results, Sanofi, July 29, Chris Viehbacher took pains to emphasize that the group's goals for 2013 were independent of potential acquisitions or partnerships.
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