Sanofi Aventis Acquires Genzyme for $20.1 Billion

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CAMBRIDGE, Mass.—Sanofi-aventis will acquire Genzyme Corp. for $74 per share in cash, or approximately $20.1 billion, according to a Feb. 16 news release.

The transaction, which has been unanimously approved by the boards of directors of the companies, is expected to close early in the second quarter of 2011, subject to customary closing conditions. In addition, Genzyme, which markets the phosphate binder Renvela for kidney disease patients, will retain its corporate brand.

Sanofi-aventis’ acquisition of Genzyme has already received anti-trust clearance from the European Commission and the U.S. Federal Trade Commission.

“Genzyme will become an important new platform in sanofi-aventis’ sustainable growth strategy and expand the company’s presence in biotechnology. Sanofi-aventis intends to make Genzyme its global center for excellence in rare diseases and the acquisition will reinforce sanofi-aventis’ commitment to the greater Boston area, where it already has a sizeable presence,” the companies said in a news release.

Genzyme and sanofi-aventis will immediately begin integration planning, including the formation of a joint Integration Steering Committee. Henri A. Termeer will resign as chairman of the board, president and CEO Genzyme following the close of the transaction, but will advise on the integration in his role as Co-Chairman of the Integration Steering Committee with Christopher A. Viehbacher, CEO of sanofi-aventis.

“This agreement with Genzyme is both consistent with our long-term strategy and creates significant long-term value for our shareholders,” said Viehbacher. “This transaction will create a meaningful new growth platform for sanofi-aventis while expanding our footprint in biotechnology. We expect it to be accretive from year one, and the CVR structure, which served as an important value bridge between our two companies, rewards both Genzyme and sanofi-aventis shareholders, particularly if Lemtrada outperforms the market’s current expectations.”

In addition to the cash payment, each Genzyme shareholder will receive one Contingent Value Right (CVR) for each share they own, entitling the holder to receive additional cash payments if specified milestones related to Lemtrada (alemtuzumab MS) are achieved over time or a milestone related to production volumes in 2011 for Cerezyme and Fabrazyme is achieved.

Terms of the CVR agreement call for additional cash payments under certain circumstances. The CVR will be publicly traded. The agreement is structured such that the economic upside at each milestone is shared between sanofi-aventis and Genzyme shareholders. The CVR terminates on December 31, 2020 or earlier if the fourth product sales milestone has been achieved.

 “This transaction represents a new beginning for Genzyme,” said Termeer. “Genzyme has a record of innovation and a unique and pioneering approach to serving patients. We also share an exciting vision of the future, one in which Genzyme and sanofi-aventis grow and innovate by developing breakthrough treatments that change the lives of people with serious diseases. Sanofi-aventis believes in what we do, in our people and in our potential. We look forward to building a sustainable future together.”

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