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The world's third largest pharmaceutical company, Sanofi-Aventis could sign a merger deal with Bristol-Myers Squibb Co within the next month, according to an unsourced story published in the French financial newsletter La Lettre de l'Expansion. The newsletter also reported that both the companies have already signed a pre merger deal last week. If the merger deal goes ahead, then the product will see Sanofi leap frog Pfizer to become the world's biggest drugs company. The deal would be a feather in the cap for Chairman Jean-Francois Dehecq who will be retiring from his position at the end of 2009. Though Sanofi refused to comment on the speculation, many analysts feel that the merger will not come as a great surprise to the pharmaceutical market. Says Oliver Kaemmerer, analyst at WestLB, "This wouldn't surprise me. Sanofi needs increased exposure to the U.S. market. They have substantially deleveraged their balance sheet since they took over Aventis, so they are prone to do something going forward."
Market analysts have for long believed Sanofi and Bristol-Myers to be natural partners for merger, with both the companies working closely in the marketing of hugely successful blood thinner Plavix, as well as Avapro for hypertension. However any merger with Bristol-Myers will be bound to dilute the holdings of Sanofi in the new company, even though at 95 billion euros, it is twice as big as Bristol, analysts added. Sanofi shares slipped by 0.9 percent at 69.30 euros, after going up by as much as 0.8 percent during the initial trading.
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