Sanofi-Aventis to pay more than $20 bil. for Genzyme
French and American flags fly outside the New York Stock Exchange after officials of French pharmaceutical company Sanofi-aventis rang the opening bell.
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STEVE CHIOTAKIS: The French pharmaceutical giant Sanofi-Aventis will pay $20 billion for Genzyme, that's an American biotech firm based in Massachusetts.
The BBC's Jon Bithrey is in London. He has more on this mega-deal that's sure to make some waves. Hi Jon.
JON BITHREY: Hello Steve.
CHIOTAKIS: Now why has this French firm picked up Genzyme? What do they want with Genzyme?
BITHREY: Well Sanofi-Aventis is France's biggest drug maker and it's been after Genzyme for a while. Largely because Sanofi doesn't have many new drugs of its own in the pipeline and it's facing competition from generic producers. Genzyme makes a lot of treatments for rare diseases. Its best selling drug Cerezyme treats liver and neurological problems. It's also producing a new range of drugs for high cholesterol.
CHIOTAKIS: $20 billion, Jon, is a lot of money. Is this a good deal for Sanofi?
BITHREY: Well not as good as it would have liked. It launched a hostile bid last September for $18.5 billion. That failed and it's had to up that to more than $20 billion to get the board to agree. But Genzyme did have some production glitches of its best selling drugs a couple of years back and that pulled down its value, making it more vulnerable to a takeover. But this is still the biggest deal in the drug industry since Merck bought Schering Plough in 2009.
CHIOTAKIS: The BBC's Jon Bithrey in London. Jon thank you.
BITHREY: Thank you Steve.