NEW YORK—Genzyme, the biotechnology firm, said Wednesday that it had agreed to be sold to French pharmaceutical giant Sanofi-Aventis SA for around $20.1 billion.
The mostly cash deal culminated this week after nine months of buyout overtures from Sanofi as the companies tussled over proper valuation for Genzyme.
In a joint statement, the companies said that the agreed upon purchase price was $74 per share of Genzyme. In addition, shareholders would receive contingent value right (CVR) provisions, which could grant current Genzyme shareholders more value should certain standards be met.
According to the company, the CVR component could be worth as much as $14 in additional value per share to current shareholders. The CVR’s value is tied to the performance of several key drugs under development by the Cambridge, Mass.-based Genzyme—Cerezyme, Lemtrada, and Fabrazyme. According to analysts, the current value of CVRs is probably around $3 to $4 per share.
“This transaction will create a meaningful new growth platform for Sanofi-Aventis while expanding our footprint in biotechnology,” said Christopher Viehbacher, CEO of Sanofi, in a statement Wednesday. “We expect it to be accretive from year one, and the CVR structure, which served as an important value bridge between our two companies, rewards both Genzyme and Sanofi-Aventis shareholders, particularly if Lemtrada outperforms the market’s current expectations.”
“We need a stronger presence in the United States, particularly on the research side,” Viehbacher said in a subsequent conference call with Wall Street analysts.
Boards for both companies approved the deal, which is expected to close in the second quarter.
The mostly cash deal culminated this week after nine months of buyout overtures from Sanofi as the companies tussled over proper valuation for Genzyme.
In a joint statement, the companies said that the agreed upon purchase price was $74 per share of Genzyme. In addition, shareholders would receive contingent value right (CVR) provisions, which could grant current Genzyme shareholders more value should certain standards be met.
According to the company, the CVR component could be worth as much as $14 in additional value per share to current shareholders. The CVR’s value is tied to the performance of several key drugs under development by the Cambridge, Mass.-based Genzyme—Cerezyme, Lemtrada, and Fabrazyme. According to analysts, the current value of CVRs is probably around $3 to $4 per share.
“This transaction will create a meaningful new growth platform for Sanofi-Aventis while expanding our footprint in biotechnology,” said Christopher Viehbacher, CEO of Sanofi, in a statement Wednesday. “We expect it to be accretive from year one, and the CVR structure, which served as an important value bridge between our two companies, rewards both Genzyme and Sanofi-Aventis shareholders, particularly if Lemtrada outperforms the market’s current expectations.”
“We need a stronger presence in the United States, particularly on the research side,” Viehbacher said in a subsequent conference call with Wall Street analysts.
Boards for both companies approved the deal, which is expected to close in the second quarter.
