Aventis calls board meeting, warns Sanofi bid would cut thousands of jobs
PARIS (AP) _ Aventis on Tuesday stepped up its campaign to shake off the hostile bid launched by smaller rival Sanofi-Synthelabo, calling a board meeting to discuss its defensive strategy. <br><br>A source
Tuesday, January 27th 2004, 12:00 am
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PARIS (AP) _ Aventis on Tuesday stepped up its campaign to shake off the hostile bid launched by smaller rival Sanofi-Synthelabo, calling a board meeting to discuss its defensive strategy.
A source close to Aventis, speaking on condition of anonymity, confirmed that its supervisory board will meet Wednesday.
A merger between the two companies would create a new drug giant ranked No. 3 in global sales behind U.S. behemoth Pfizer and British-based GlaxoSmithKline PLC.
But Aventis has vowed to resist the $60 billion hostile bid launched Monday by Sanofi and is urging shareholders not to accept a deal that it says would leave them shortchanged.
On Tuesday, an unidentified Aventis source was quoted in the French financial daily Les Echos warning that the tie-up would cost ``10,000 to 12,000 jobs'' if it went ahead.
Aventis has hired a group of advisers, including investment bank Morgan Stanley, to help it defeat the bid.
Sanofi chairman and CEO Jean-Francois Dehecq has so far declined to say how many jobs might be lost, saying he preferred to discuss the cuts with trade unions first.
The French government has indicated it would support a merger between the country's two largest drug companies.
Romano Prodi, president of the European Commission, also said Tuesday that a merger would ``certainly be positive.''
He also told Europe-1 radio that the Brussels, Belgium-based EU executive would have to examine any deal for potential competition problems.
Sanofi offered five of its own shares and $86 for every six Aventis shares _ valuing Aventis stock at about $71.
But Aventis shares rose to $74.41 by early afternoon Tuesday, extending gains made the previous day as investors held out for a better offer from Sanofi or another investor.
In Tokyo, meanwhile, an Aventis subsidiary said Tuesday that five Japanese died after taking its drug to treat arthritis and it has asked doctors to take further precautions before prescribing it.
It has not been confirmed whether the drug, Arava, caused the deaths, but doctors in two cases believe it may have been responsible, said Yota Kikuchi, a spokesman at the company's Tokyo-based subsidiary, Aventis Pharma Japan.
Sixteen people developed interstitial pneumonia, a debilitating lung condition, after taking the drug. Five of them between the ages of 57 and 71 subsequently died, Kikuchi said.
The company has warned doctors not to prescribe the drug to patients with respiratory problems, a history of interstitial pneumonia or lung problems. It will further advise that X-rays be conducted on any patient who is to receive the drug for the first time, Kikuchi said.
``We were aware of the side effects ... but we did not imagine such a frequency. We will promptly investigate whether the drug was responsible,'' said Masaki Noguchi, vice president for Aventis Pharma Japan.
Since its launch in Japan in September, some 3,400 people had taken the drug, which is generically known as leflunomide and is used to treat rheumatoid arthritis _ a chronic illness that can result in inflammation of the joints, stiffness, loss of movement and sometimes deformity.
Overseas, the drug has been administered to 400,000 people, with 80 of them developing interstitial pneumonia, Kikuchi said.
Arava was put on the market in 1998 in the United States and has since been made available in 72 countries. In 2002, Arava worldwide sales were $300 million, according to a company statement.