Sanofi agrees long-awaited takeover of Genzyme

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.

PROMOTED VIDEO
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior Analyst - ALM Data - Banking - Halifax

£350 - £400 per day + competitive: Orgtel: Senior Analyst, ALM Data, Halifax, ...

Java developer - Banking - London - Up to £600/day

£500 - £600 per day: Orgtel: Java developer - Banking - London - Up to £600/d...

Liquidity Reporting-Basel III-LCR-Bank-£400/day

£400 per day + competitive: Orgtel: Liquidity Reporting - Basel III - LCR - Ba...

Client Services Associate (MS Office, Analysis, Graduate)

Negotiable: Harrington Starr: Client Services Associate (Microsoft Office, Ana...

Day In a Page

Save the tiger: The animals bred for bones on China’s tiger farms

The animals bred for bones on China’s tiger farms

The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

A former custard factory, a Midlands bog and a Leeds cemetery

Introducing the top 50 hidden spots in Britain
Ebola epidemic: Plagued by fear

Ebola epidemic: Plagued by fear

How a disease that has claimed fewer than 2,000 victims in its history has earned a place in the darkest corner of the public's imagination
Chris Pratt: From 'Parks and Recreation' to 'Guardians of the Galaxy'

From 'Parks and Recreation' to 'Guardians of the Galaxy'

He was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star
How live cinema screenings can boost arts audiences

How live cinema screenings can boost arts audiences

Broadcasting plays and exhibitions to cinemas is a sure-fire box office smash
Shipping container hotels: Pop-up hotels filling a niche

Pop-up hotels filling a niche

Spending the night in a shipping container doesn't sound appealing, but these mobile crash pads are popping up at the summer's biggest events
Native American headdresses are not fashion accessories

Feather dust-up

A Canadian festival has banned Native American headwear. Haven't we been here before?
Boris Johnson's war on diesel

Boris Johnson's war on diesel

11m cars here run on diesel. It's seen as a greener alternative to unleaded petrol. So why is London's mayor on a crusade against the black pump?
5 best waterproof cameras

Splash and flash: 5 best waterproof cameras

Don't let water stop you taking snaps with one of these machines that will take you from the sand to meters deep
Louis van Gaal interview: Manchester United manager discusses tactics and rebuilding after the David Moyes era

Louis van Gaal interview

Manchester United manager discusses tactics and rebuilding after the David Moyes era
Will Gore: The goodwill shown by fans towards Alastair Cook will evaporate rapidly if India win the series

Will Gore: Outside Edge

The goodwill shown by fans towards Alastair Cook will evaporate rapidly if India win the series
The children were playing in the street with toy guns. The air strikes were tragically real

The air strikes were tragically real

The children were playing in the street with toy guns
Boozy, ignorant, intolerant, but very polite – The British, as others see us

Britain as others see us

Boozy, ignorant, intolerant, but very polite
How did our legends really begin?

How did our legends really begin?

Applying the theory of evolution to the world's many mythologies
Watch out: Lambrusco is back on the menu

Lambrusco is back on the menu

Naff Seventies corner-shop staple is this year's Aperol Spritz