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Aventis to focus on drugs
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November 15, 2000: 9:31 a.m. ET
Sale of agricultural products unit could fetch $5B for Franco-German drug maker
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LONDON (CNNfn) - Franco-German drug maker Aventis SA unveiled plans Wednesday to narrow its focus on pharmaceuticals by selling its slow-growing agricultural products unit, a divestment that analysts said could fetch up to 6 billion euros ($5.1 billion) as the company concentrates on more promising areas.
Rivals of Aventis, which was formed last year by the union of France's Rhone-Poulenc SA and Germany's Hoechst AG, have already separated their farm-chemicals businesses to trade as separate companies. Anglo-Swedish AstraZeneca PLC and Swiss drug firm Novartis AG recently floated their joint agrochemicals interests as a new company, Syngenta AG.
"Agriculture is a low-growth area and has been dragging down the rest of the company," said Eric Bernhardt, a fund manager with Clariden private bank in Zurich, who owns Aventis stock. "The market is growing only 2 to 3
percent a year against the 11 percent or so revenue growth expected from pharmaceuticals."
 In Paris Wednesday afternoon, shares of Aventis (PAVE) climbed 2.7 percent, to  88.60.
The Aventis CropScience business – nearly one-quarter owned by Germany's Schering AG – has been hit by recent controversy over its StarLink genetically modified corn. Aventis may be vulnerable to liability claims after StarLink corn, which has been approved for use in animal but not human feed, was found in consumer foods.
Analysts warned that Aventis might find it tough to get a good price for the business because of depressed prices and demand for agricultural products and consumer reluctance to embrace genetically modified produce.
Schering has consented to the sale but has not said whether it's interested in selling its stake. UBS Warburg's Beadle said Schering might be reluctant to sell, particularly if such a move left it vulnerable to a takeover bid.
"Any predator will find Schering far more attractive with 1.5 billion of cash on its balance sheet than a stake in an agchem business, so they may well hold on to their 24 percent stake," he said.
Aventis plans to sell the business by the end of 2001, possibly in an initial public offering, under the name Agreva.
--from staff and wire reports 
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