The board of the Franco-German drug maker Aventis accepted a sweetened takeover bid last night from its smaller rival Sanofi-Synthelabo.
Sources close to Aventis said Sanofi had increased its offer to close to €70 (£47) a share, from the €58.11 that its previous bid was worth. The offer values Aventis at more than €55bn and thwarts an approach from Novartis.
The deal, which ends a three-month takeover battle, corresponds to France's "strategic interests," the French Prime Minister, Jean-Pierre Raffarin, said. If approved by shareholders, the merger would create the world's third largest pharmaceutical giant behind Pfizer of the US and Britain's GlaxoSmithKline.
M. Raffarin said the deal would keep jobs and decision-making of the drug companies in France. The health minister Philippe Douste-Blazy noted that the tie-up would give France a leading position in pharmaceuticals.
The Aventis board met for more than six hours to consider the bid. Sanofi increased its offer under pressure from its Swiss rival Novartis, which on Thursday accepted Aventis' invitation to enter talks on a friendly merger. However, no formal offer was placed on the table yesterday by the Swiss drug giant.
Earlier, it had been suggested that Aventis was weighing up offers from both Sanofi and Novartis.
But Novartis said late last night that it would not make a counter-offer. "Novartis ... decided to discontinue negotiations and not submit a bid for a potential combination of Aventis and Novartis' businesses," it said.
"Novartis had entered negotiations at the unanimous request of the Aventis supervisory board as an alternative to Sanofi's hostile bid for Aventis. Following Aventis' decision to engage in discussions with Sanofi, at the strong intervention of the French government, Novartis decided not to proceed. Novartis' decision is final."
The takeover battle was sparked after Aventis which makes the anti-thrombosis drug Lovenox urged shareholders to reject Sanofi's hostile offer and instead asked Novartis to enter talks on a merger.
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