Healthy Skepticism Library item: 297

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: news

Gauthier-villars D.
French Official Wants Government To Stand Neutral in Sanofi's Bid
Dow Jones Newswires 2004 Apr 12

Full text:

French Industry Minister Patrick Devedjian said the government has a duty to remain neutral on French drug maker Sanofi-Synthelabo SA’s hostile bid for bigger rival Aventis SA.

In comments that may encourage Swiss drug maker Novartis AG to formally enter the battle to create one of the world’s biggest drug companies, Mr. Devedjian said: “The government has a duty to abide by French and European legislation. The state is obliged to observe neutrality.” Mr. Devedjian said he is scheduled to meet Aventis Chief Executive Igor Laundau in coming days. He said he would also be prepared to meet Novartis CEO Daniel Vasella.

The comments are in marked contrast with previous signals from French government ministers who have strongly favored the Sanofi cash-and-stock offer, valued at €45.31 billion ($54.74 billion), as a means of creating a “national champion.” Aventis’s market value according to its closing price April 8 was €50.28 billion.

Franco-German Aventis invited Novartis on April 2 to launch a “white knight” bid to counter the Sanofi offer. But Novartis has said it won’t do so unless the French government indicates it wouldn’t oppose a move by the Swiss company.

Under French and European Union law, governments have limited powers to oppose takeovers by foreign companies outside areas of national security.

Asked if his views represented a switch from previous positions by several cabinet ministers, Mr. Devedjian said on the sidelines of a news conference in the French capital, “There can be individual views, but the state must remain neutral.”

On April 4, French Health Minister Philippe Douste-Blazy said in France’s Journal Du Dimanche: “Let’s defend French industry. When we have the opportunity to create, in our country, one of the world’s biggest pharmaceuticals companies, we must seize it.”

Mr. Devedjian said he is scheduled to meet Aventis Chief Executive Igor Laundau in coming days. He said he would also be prepared to meet Novartis CEO Daniel Vasella.

Meanwhile, Sanofi Chairman Jean-Francois Dehecq, a longtime associate of French President Jacques Chirac, has sought to enlist the support of trade unions at Aventis. At a meeting with representatives of Aventis’s French unions in Strasbourg on Thursday, Mr. Dehecq said his merger plan wouldn’t lead to layoffs, said union officials who attended the meeting.

Sanofi’s made its offer on Jan. 26 and is likely to keep it on the table until the end of May.