|
Sanofi, Synthelabo merge
|
 |
December 3, 1998: 3:17 a.m. ET
Elf, L'Oréal drug units follow Rhône, Hoeschst in another European pharma merger
|
LONDON (CNNfn) - France's second and third-biggest drug companies, Sanofi and Synthelabo, plan to merge to create a new industry powerhouse with sales of 35 billion francs ($6.2 billion) and market value of 166 billion francs ($29.5 billion).
Sanofi-Synthelabo will be the 6th largest pharmaceutical company in Europe.
Shareholders in the two companies will be able to exchange their current holdings for shares in the new company at a ratio of 13 Sanofi shares to 10 Synthelabo, shares.
The deal will propel Sanofi (PSQ), controlled by oil giant Elf Acquitaine (PAQ), and Synthelabo (PSD), whose parent is L'Oréal (POR), to a position in the world's top 20 drug companies by size.
With a market capitalization at Wednesday's closing price of 107 billion francs ($19 billion), Sanofi is France's second biggest drug company. Synthelabo is the country's third biggest and has a market capitalization of 59 billion francs ($10.5 billion).
The tie-up marks further consolidation in the European pharmaceutical industry. France's Rhône-Poulenc (PRPP) and Germany's Hoechst [FSE: FHOE] announced Tuesday they will merge their drug and agrochemical businesses to create a new company called Aventis.
Sanofi and Synthelabo said profit after tax would rise gradually over the next three years as a result of the deal. It is expected to contribute an additional 1.3 billion francs to the bottom line by 2002.
The deal will exclude Sanofi's beauty products division. These assets, which include Yves Saint Laurent perfumes, will be sold.
Elf, which has a controlling stake in Sanofi, will own 35.1 percent of the new company. L'Oréal, which controls Synthelabo, will have a 19.4 percent stake. 
|
|
|
|
|
 |
|
