On 1st January 2005, the merger of the French pharmaceutical groups Sanofi-Synthelabo and Aventis, gave birth to Sanofi-Aventis, Europe's leading company in the sector in terms of turnover, and the third largest group worldwide. The company now relies on an international research network to develop its activities in seven major therapeutic areas: cardiovascular, thrombosis, oncology, metabolic diseases, central nervous system, internal medicine and vaccines. The group employs around 100,000 people in over 100 countries.
A reconciliation of this magnitude has not been without effect. The shareholders of both groups, such as financial analysts, businesses or politicians have addressed this acquisition to determine the ins and outs, and profits and losses it would create for each player. It is this analysis that we will in turn do retrospectively. After nearly two years, we will try to analyze the promise that surrounded the merger, and to link up with what it brought as change.
To achieve these ends, we will initially analyze the specificities of the pharmaceutical industry, first at the global level, and then in the context of European competition. This comprehensive study will also identify the forces that govern the market through an analysis of Porter.
The work will then turn to the internal characteristics of the two groups that helped them merge: their histories, their strategic capabilities and the expectations of their stakeholders. We then develop a summary of the facts that led to the merger, and eventually led to the merged entity Sanofi-Aventis. In the last part of the work we present the assets, review the past two years, and briefly assess the group's prospects in the near future.
[...] However, it has been observed in recent years, that strategic groups, whether through mergers or acquisitions (e.g. recovery of Pharmacia by Pfizer), reflect a trend towards concentration. Similarly, there was a tendency for large firms to compete in terms of R & D on the same therapeutic areas or the same products. Nevertheless, it would be precipitate to translate these elements into a general trend of industry consolidation and the arguments against such a concentration are numerous, including loss of innovation, loss of productivity and R & and increased bureaucracy. [...]
[...] Sanofi's offer was extended until September to allow Sanofi-Aventis with more than 95% stake in Aventis, to withdraw from the exchange and merge the two companies. The new Sanofi-Aventis group was then formed, and became operational on 1 January 2005, headed by Jean-Francois Dehecq, the former CEO of Sanofi-Synthelabo, who can boast of having set up the third largest pharmaceutical group in the world behind Pfizer and GlaxoSmithKline in less than one year. b. The report of the European Commission concerning the merger On April the European Commission published its report approving the acquisition of Aventis by Sanofi-Synthelabo. [...]
[...] To conclude, if the birth of Sanofi-Aventis had left some investors wanting more, many have quickly recognized that this reconciliation was a highly strategic transaction. Economy of scale, optimal size, geographic expansion, all the elements were in favor of the transaction, which fits perfectly into the movement that the entire pharmaceutical sector is experiencing. The company experienced a difficult year in 2006, but there is much to bet that it is structurally fit for the future. Its R & D will eventually produce fruit, and enable Sanofi-Aventis to sail ahead in growth compared to the other players in the sector, a growth that should now be based on developing countries. [...]
[...] PART The global pharmaceutical industry Before any analysis of Sanofi-Aventis, we describe through the first part, the market as a whole, and try to identify the major constraints of its main actors. This industry turns out to be unusually complex with respect to the various national laws on the subject and senior financial risks, but also the high degree of competition that exists between firms, including protection of intellectual property. The actors Overall, there are three major groups of distinct actors in the pharmaceutical industry. [...]
[...] The group is also active in the field of chemistry but at a more functional than strategic level. Aventis has a strong presence in the U.S. where it has a major research center and several industrial sites. In 2004, the workforce of Aventis comprised of 70,000 people in France, the United States and Germany. Aventis has a turnover of 17,015 million Euros for 2003, and a profit of 1,901 million Euros, a drop of Aventis is a corporation funded by shares. [...]
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