Sanofi-Aventis and Bristol-Myers Squibb Co could announce a friendly merger deal within the next few weeks to create the world's biggest drugs company, according to a report on Monday. In an unsourced story, French financial newsletter La Lettre de l'Expansion said a pre-merger deal was thought to have been signed last week.
Buying Bristol-Myers would be a coup for Sanofi's ambitious chairman and veteran dealmaker, Jean-Francois Dehecq, who is due to retire from the French firm at the end of 2009.
The acquisition of the US company - which has a market value of around $51.5 billion - would see Sanofi leapfrog Pfizer Inc as the biggest pharmaceuticals company in the world by sales and push GlaxoSmithKline Plc back into third place.
Sanofi and Bristol-Myers have long been tipped as possible merger partners, since they work together in marketing the hugely successful blood thinner Plavix, as well as Avapro for hypertension.
A Sanofi spokesman said the company did not comment on press speculation. Still, many analysts and industry executives are convinced Sanofi will have been taking a long, hard look at US-based Bristol-Myers in recent months.
"This wouldn't surprise me. Sanofi needs increased exposure to the US market. They have substantially deleveraged their balance sheet since they took over Aventis, so they are prone to do something going forward," WestLB analyst Oliver Kaemmerer said.
Any bid could be a mixture of cash and shares, he said. Novartis Chairman and Chief Executive Daniel Vasella said only last month he believed such a deal could be on the cards. "I would not be surprised if companies, which are connected via products - like Sanofi-Aventis and Bristol-Myers Squibb - think about a merger," Vasella told a Swiss newspaper.
Sanofi, with a market capitalisation of 95 billion euros ($123 billion), is twice the size of Bristol-Myers, but its shares are less highly rated, and analysts believe an acquisition could significantly dilute Sanofi earnings.
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