Sanofi to seal Genzyme deal soon, sources say

By Reuters
Posted Feb. 4 at 1:16 p.m.

French drugmaker Sanofi-Aventis could unveil an agreement to acquire U.S. biotech Genzyme before Wednesday, the day Sanofi is due to publish its 2010 results, sources close to the matter said.

A deal would bring to a close the long-running saga sparked by Genzyme’s rejection of Sanofi’s initial $18.5 billion offer, worth $69 a share, which the French group has extended to Feb. 15.

“We are close to an agreement,” one source close to the deal said. Another source said that Wednesday was a likely cut-off for an announcement.

“I think everyone is expecting it to happen before the results (on Wednesday),” said another source, adding there was a chance a deal might be announced over the weekend.

Sanofi-Aventis declined to comment. The group, which has a market value of 66.5 billion euros ($90.66 billion), has agreed to raise its bid above $70 per share and to include contingent value right payments linked to experimental multiple sclerosis drug Lemtrada, sources have said.

Sanofi believes buying Genzyme would give it a new area for growth in the high-margin business of rare diseases. It would mark the biggest acquisition of 50 sealed by Sanofi chief Chris Viehbacher since he took the drugmaker’s reins in 2008.

Sanofi is seen posting a 3.2 percent decline in underlying earnings per share for the fourth quarter, excluding items such as amortization and litigation costs, according to the average of 13 estimates in a Reuters poll of analysts.

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