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Sanofi-aventis looking at $20bn acquisition

Sanofi-aventis may be planning a US acquisition worth over $20bn with speculation focused on a US-based biotech company

There are indications that sanofi-aventis (S-A) is planning an acquisition in the US worth $20bn or more. The report comes from Bloomberg, stating that although sources say that the process is in the very early stages, S-A CEO Chris Viehbacher recently briefed the board on the transaction.

Since Viehbacher became CEO in 2008, S-A has spent around $17bn on 25 acquisitions. The executive previously said that the company will continue purchases at last year's rate of two to three deals per month in 2010, adding that small or mid-sized deals of about $15bn or lower are preferable.

UBS analyst Fabian Wenner believes that a US-based biotechnology company would be a good fit for S-A strategically. "What they need most is biological antibody competencies," he said.

Analysts cited Allergan, Biogen Idec and Genzyme as possible targets, with market values of $17bn, $12.7bn and $13bn, respectively. Meanwhile, shares of Allergan jumped as much as 9 per cent, while Genzyme and Biogen Idec both were up at least 5 per cent on the speculation.

S-A is seeking acquisitions to help offset sales lost from the launch of generic versions of Eloxatin (oxaliplatin) and Plavix (clopidogrel). Drugs accounting for more than 20 per cent of the company's revenue will face generic competition by 2013, and Viehbacher has identified emerging markets, prescription drugs, vaccines and diabetes, as well as consumer health, as particular targets for growth.

The French drug company recently announced a deal to acquire TargeGen for up to $560m.

5th July 2010

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