Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Sanofi offers $18.5 billion for Genzyme

genzsano.png By Julianne Pepitone, staff reporter


NEW YORK (CNNMoney.com) -- French pharmaceutical firm Sanofi-Aventis is stepping up the pressure on U.S. biotech firm Genzyme, going public with an $18.5 billion cash offer and hinting it may consider a hostile takeover if Genzyme refuses to talk.

Sanofi said it first made the offer July 29 but decided to go public after being rebuffed by Genzyme. Monday's announcement is aimed at getting Genzyme to the table, or at the very least, to bring the offer to shareholders, said Sanofi in a statement.

"We feel we are left with no choice but to take our compelling proposal directly to your shareholders by making its terms public," Sanofi chief executive Christopher Viehbacher said in a letter sent to Genzyme.

Genzyme rebuffed the offer. "It provides no new information and no improvement in price, and therefore fails to establish a basis for engagement by the Genzyme board," chief executive Henri Termeer said in a response letter to Sanofi.

Sanofi's letter detailed a months-long attempt to engage Genzyme in acquisition discussions. Genzyme, a bio-pharmaceutical company that makes products to help treat rare diseases and cancer, was apparently "unwilling even to meet" said Sanofi.

Sanofi first sent Cambridge, Mass.-based Genzyme a letter on July 29 offering to buy it for $69 per share in cash. That was a 38% premium over Genzyme's closing price on July 1.

Sanofi said Genzyme also rejected an Aug. 11 proposal as well without agreeing to a meeting.

"After our repeated requests, you agreed only to let our respective financial advisors hold a meeting of limited scope," Sanofi said.

Termeer reiterated the company's previous position, saying, "without exception, each member of the Genzyme board believes this is not the right time to sell the company ... your opportunistic takeover proposal does not begin to recognize the significant progress underway to rectify our manufacturing challenges or the potential for our new-product pipeline."

Sanofi, which makes vaccines and drugs, said it could help Genzyme reach across the globe. But it also alluded to the smaller company's ongoing problems. Genzyme was forced to close its manufacturing plant last year because of a viral contamination, and the company recently said it could take three to four years to resolve the issue fully.

"Your continued refusal to enter into constructive discussions will serve only to further delay the ability of your shareholders to receive the substantial value [of] our offer," the Sanofi letter warned.

Neither company was available for immediate comment.

In U.S. trading, shares of Sanofi (SNY) closed down 1% while Genzyme (GENZ, Fortune 500) gained 3.4%. To top of page

Index Last Change % Change
Dow 18,512.13 38.38 0.21%
Nasdaq 5,149.50 39.45 0.77%
S&P 500 2,170.98 1.80 0.08%
Treasuries 1.52 -0.05 -3.07%
Data as of 3:42pm ET
Company Price Change % Change
Bank of America Corp... 14.61 0.08 0.55%
Apple Inc 103.74 7.07 7.31%
Chesapeake Energy Co... 5.18 -0.17 -3.18%
Freeport-McMoRan Inc... 13.12 0.44 3.47%
Facebook Inc 122.90 1.68 1.39%
Data as of 3:27pm ET
Sponsors

Sections

HSBC banker arrested at JFK airport as he prepared to leave the country. He and former trader face federal charges they manipulated currency trades. More

The Federal Reserve, led by Chair Janet Yellen, didn't raise interest rates at its July meeting, which ended Wednesday. More

A lawyer and artist in Washington D.C. bought the ClintonKaine.com domain for $8 in 2011. That prescient decision could yield him tens of thousands now. More