Sanofi agrees long-awaited takeover of Genzyme
Thursday 17 February 2011
The French pharmaceuticals company Sanofi-aventis is to buy the US biotech firm Genzyme Corp in a multibillion-dollar deal it has been pursuing for nine months.
In the second largest biotech deal on record, Sanofi will pay $20.1bn (£13bn) in cash, or $74 per share, plus payments linked to the success of the US firm's drugs, including Lemtrada, Genzyme's experimental multiple sclerosis treatment.
In addition to the initial cash price, Genzyme shareholders will receive a so-called contingent value right, which will be publicly traded, mimicking an option, and which will terminate at the end of 2020 – or earlier if the specified milestones are achieved.
The CVR will give holders the right to additional payments, which could add another $3.8bn to the price tag, although the final figure depends on factors such as production levels and sales of the Genzyme drugs in question.
Sanofi's interest dates back to last year, when the French drug maker's chief executive, Christopher Viehbacher, first suggested the combination to Henri Termeer, his counterpart at Genzyme.
The record takeover comes as Sanofi attempts to bolster its revenues before a number of its patents expire. The French group said the acquisition, which is expected to close in the second quarter, would boost its underlying earnings by between €0.75 (63p) and €1 per share by 2013.
"This agreement with Genzyme is both consistent with our long-term strategy and creates significant long-term value for our shareholders," Mr Viehbacher said.
"This transaction will create a meaningful new growth platform for Sanofi-Aventis while expanding our footprint in biotechnology."
Dominic Valder, an analyst at Evolution Securities, said the acquistion meant that Sanofi's patent cliff – industry jargon for the point at which earnings inflect as big-selling drugs go off patent – had "become a patent plateau".
"The stock is now likely to have flat earnings – at approximately €7 per share for the next three years – before earnings growth starts again post 2013," he explained.
- 1 Autistic adults could take pure MDMA to 'reduce social anxiety'
- 2 Before you complain about your GP, this is what you need to know about actually doing the job
- 3 Father of 12 accused of raping, beating, starving and abusing his own children in US 'cult'
- 4 Britain's Got Talent 2015: Jamie Raven divides Twitter as fans expose mind-boggling magic trick
- 5 Charlie Charlie Challenge explained: not a Mexican demon being summoned — it's gravity
People are criticising Fifa World Cup sponsors with corrupt corporate logos
Natalie Portman tells Harvard graduates: 'Accept your lack of knowledge'
British tourists complain impoverished boat migrants are making holidays 'awkward' in Kos
Fifa corruption live: Sebb Blatter warns 'more bad news may follow' as he clings to power
Skull found in Spain could be the world's first-ever murder victim
EU referendum: David Cameron's rules are a 'democratic disgrace', says French-born Scottish politician set to be denied a vote
SNP fury as HS2 finds 'no business case' for taking fast train service to Scotland
Australian man punched in the face for defending Muslim women from abuse on train
A nation of inequality: How the UK is failing to feed its most vulnerable people
David Starkey 'tells Amal Clooney to shut up and stop over-promoting human rights'
EU referendum: David Cameron to deny EU migrants and under-18s the chance to vote
iJobs Money & Business
£30 - 35k: Guru Careers: We are seeking a Pricing Analyst to join a leading e-...
£20000 - £25000 per annum + OTE £45K YR1: SThree: At SThree, we like to be dif...
£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...
£55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...