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.
Sales of the tablet are set to fall again, say analysts
Does Chris Grayling realise what a vague concept he is dealing with?
Met Police confirm it was a 'minor disturbance' and no-one was arrested
Concerns raised phenomenon is threatening resort's image as a family destination
I Am Bread could actually be a challenging and nuanced title
Eccentric Fury star, 28, reveals he is 'not a really confident actor'
Peter Biaksangzuala died from his injuries in hospital on Sunday
The X Factor's judges colourful outfit was mocked by Simon Cowell
Footage shot by a passerby shows moment an ill man was carried out of his burning home
- 1 Indian footballer Peter Biaksangzuala dies after injuring spine doing somersault celebration
- 3 Drink alcohol and eat meat to improve male fertility - but cut down on coffee, studies suggest
- 5 Lynda Bellingham dead: Loose Women presenter dies after battle with colon cancer
Sophia Loren: How I rejected Cary Grant and 'pulverised' Marlon Brando with my eyes
Banksy arrest hoax: Internet duped by fake report claiming that the street artist's identity has been revealed
'Russian submarine spotted' by Swedish military off coast of Stockholm
Kentucky gang rape: 15-year-old boy left in critical condition after sexual attack by group at party
Oscar Pistorius sentence: Athlete's wealth and notoriety provoke an overdue debate on South African prisons
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Sorry Judy Finnigan – Ched Evans is no less sickening than an alleyway rapist
Residents should throw a street party and mix with immigrant neighbours, councils told
Workers 'could be forced to pay £5 a week' to get benefits
Russell Brand threatened with arrest after filming outside Fox News headquarters
Amal Alamuddin calls for the return of the Elgin Marbles from Britain: 'Injustice has persisted for too long'
iJobs Money & Business
£18 - 23k + Benefits: Guru Careers: We are seeking a Customer Service Executiv...
£60 - 65k + Benefits: Guru Careers: We are seeking a ASP.NET Web Developer / ....
£60,000 - £80,000: Saxton Leigh: Our client is an leading Asset Manager based...
£27000 - £32000 Per Annum: Clearwater People Solutions Ltd: Our large charity ...