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Abstract:
Monday, 26 January, 2004, the 64-year-old Chief Executive of France's Sanofi-Synthelabo SA shocked the genteel French business establishment by launching a 48 billion euro hostile bid for local rival Aventis SA, a company twice the size of his own by sales. This case presents the situation of Sanofi-Synthelabo and Aventis before the hostile bid led by Sanofi. The case gives an overview of the pharmaceutical industry, the European market and the current trends. Within this backdrop the case discusses the companies Sanofi-Synthelabo and Aventis, their history of evolution, product pipe-line and their global strategies. The purpose of this case is to bring the reader to understand the complexity of megamergers and acquisitions, in the backdrop of the French context. Some of the issues raised in the case are: (1) do pharmaceutical companies need to globalise to survive? (industry analysis and globalisation); (2) are mergers and acquisitions a better way forward than internal organic growth? (global logic of megamergers, hostile bid and defense strategy); (3) are alliances necessary as the costs of bringing new drugs to market continue to increase? (strategies for synergy with respect to product portfolio, product pipelines, international presence); and (4) European Union and the French State (creation of 'National Champions'). The case provides a stimulating environment for discussion on these topics related to strategy and international management in the pharmaceutical industry.
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