>>the jobs cut is considered here unbereable by politicians.<<
Yes, I can imagine that. Jobs affect political programs and funding in the U.S. also, but these days labor is a much stronger force in France than it is here.
>> UPDATE - Sanofi readies bid for Aventis on Monday -sources
Saturday January 24, 12:24 pm ET By Noelle Mennella and Caroline Jacobs
PARIS, Jan 24 (Reuters) - France's second largest drugmaker, Sanofi-Synthelabo SA (Paris:SASY.PA - News), is preparing to make a takeover bid for larger rival Aventis SA (Paris:AVEP.PA - News) as early as Monday morning, trade union sources told Reuters on Saturday.
Sanofi's board will meet on Sunday evening to approve the bid, which is likely to value Aventis at more than $60 billion and would create a French national champion vying for second place in the global industry with GlaxoSmithKline Plc (London:GSK.L - News).
Chairman and Chief Executive Jean-Francois Dehecq will prepare the ground by holding a conference call with Sanofi's trade unions at 1930 GMT on Sunday, after the board meeting ends, the sources said.
Industry analysts said they expected Sanofi to make an all-share offer at a modest premium to Aventis' current share price.
The decision to launch a bid follows weeks of merger speculation, which has driven shares in both companies higher as investors have welcomed the prospect of cutting costs, combining sales forces and pooling drug pipelines.
Strasbourg-based Aventis, however, sees no need to merge at present and is preparing to defend itself against the hostile approach, according to people close to company.
It believes its shares are significantly undervalued and argues that a hostile bid battle -- a rare occurence in the drugs sector -- would damage both firms.
But the French government favours an alliance that would create a national standard-bearer in a science-driven industry and that could spark a new wave of mergers and acquisitions in Europe's healthcare sector.
Speaking at the sidelines of the World Economic forum in Davos, Switzerland, French Finance Minister Francis Mer told French radio Europe 1 earlier on Saturday it would be "rather positive" if Aventis and Sanofi, France's first and second largest drugmakers got together.
Spokesmen at Sanofi and Aventis both declined to comment on developments on Saturday.
SWEETENER?
Paul Diggle, industry analyst with Code Securities in London, said he expected Sanofi to offer a premium to reflect the fact that Aventis sales are twice as high as Sanofi's, though their market values are similar.
"Aventis shareholders are likely to get a bit of sweetener because of the disparity in market cap to sales. I'd have thought Sanofi could go to a 15 percent premium," he said.
A second analyst, who asked not to be identified, thought Sanofi could offer around 67 euros per share -- a premium of 18 percent to Friday's close of 56.60 euros.
Aventis is expected to fight hard over valuation, even if it eventually agrees to enter discussions with Sanofi. It plans to highlight uncertainties about the patent on Sanofi's best-selling blood thinner Plavix, since if Sanofi loses a legal case over the drug this year its shares could plummet.
Aventis prepared on Friday for Sanofi's expected approach by hiring three leading investment banks -- Goldman Sachs (NYSE:GS - News), Morgan Stanley (NYSE:MWD - News) and private investment bank Rothschild to work on a defence, according to industry sources said. Merrill Lynch (NYSE:MER - News) is tipped to be working for Sanofi.
All of the banks declined to comment.
SANOFI SHAREHOLDERS MEET
Leading Sanofi shareholders cosmetics firm L'Oreal (Paris:OREP.PA - News) and oil giant Total (Paris:TOTF.PA - News) -- joint owners of 44 percent of the group -- are meeting over the weekend to consider their position on a bid.
L'Oreal's board meeting finished on Saturday afternoon, a company source said. L'Oreal, which owns a 19.5 percent stake in Sanofi, declined to comment.
Total's board will convene on Sunday, industry sources said. A company spokeswoman declined to confirm or deny this.
In the past, L'Oreal has been reluctant to see its stake in Sanofi diluted via a merger but Total has made clear it does not view its Sanofi stake as a core holding.
Both companies agreed in November not to extend a pact that prevents them from selling their shares after it expires in December 2004, a decision which has prompted Sanofi to seek strategic options to ensure its future. <<
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