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Strategic analysis Sanofi-Aventis

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case study
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23 pages
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  1. Introduction
  2. The global pharmaceutical industry
    1. Actors
    2. The types of drugs
    3. The 5 Forces of Porter
    4. Threats and Opportunities
  3. The European pharmaceutical industry
    1. The regulations at the European level
    2. The European market players
  4. The merger between Sanofi and Aventis
    1. Two historical companies
    2. The causes of the merger
    3. The stages of creation
  5. Sanofi-Aventis
    1. Presentation of the Group
    2. An evaluation of the merger two years later

On 1st January 2005, the merger of the French pharmaceutical groups Sanofi-Synthelabo and Aventis, gave birth to Sanofi-Aventis, Europe's leading company in the sector in terms of turnover, and the third largest group worldwide. The company now relies on an international research network to develop its activities in seven major therapeutic areas: cardiovascular, thrombosis, oncology, metabolic diseases, central nervous system, internal medicine and vaccines. The group employs around 100,000 people in over 100 countries.

A reconciliation of this magnitude has not been without effect. The shareholders of both groups, such as financial analysts, businesses or politicians have addressed this acquisition to determine the ins and outs, and profits and losses it would create for each player. It is this analysis that we will in turn do retrospectively. After nearly two years, we will try to analyze the promise that surrounded the merger, and to link up with what it brought as change.

To achieve these ends, we will initially analyze the specificities of the pharmaceutical industry, first at the global level, and then in the context of European competition. This comprehensive study will also identify the forces that govern the market through an analysis of Porter.

The work will then turn to the internal characteristics of the two groups that helped them merge: their histories, their strategic capabilities and the expectations of their stakeholders. We then develop a summary of the facts that led to the merger, and eventually led to the merged entity Sanofi-Aventis. In the last part of the work we present the assets, review the past two years, and briefly assess the group's prospects in the near future.

[...] However, it has been observed in recent years, that strategic groups, whether through mergers or acquisitions (e.g. recovery of Pharmacia by Pfizer), reflect a trend towards concentration. Similarly, there was a tendency for large firms to compete in terms of R & D on the same therapeutic areas or the same products. Nevertheless, it would be precipitate to translate these elements into a general trend of industry consolidation and the arguments against such a concentration are numerous, including loss of innovation, loss of productivity and R & and increased bureaucracy. [...]


[...] Sanofi's offer was extended until September to allow Sanofi-Aventis with more than 95% stake in Aventis, to withdraw from the exchange and merge the two companies. The new Sanofi-Aventis group was then formed, and became operational on 1 January 2005, headed by Jean-Francois Dehecq, the former CEO of Sanofi-Synthelabo, who can boast of having set up the third largest pharmaceutical group in the world behind Pfizer and GlaxoSmithKline in less than one year. b. The report of the European Commission concerning the merger On April the European Commission published its report approving the acquisition of Aventis by Sanofi-Synthelabo. [...]


[...] The steps in the creation of Sanofi-Aventis The takeover of Aventis by Sanofi-Synthelabo has not been without its twists. In all, nearly a year has elapsed since the contested bid by Sanofi on January until the merger becomes truly operational on 1 January 2005. a. The proposed merger of Sanofi-Synthelabo On January Sanofi-Synthelabo, the 14 th largest global pharmaceutical company, launched an unsolicited takeover of its rival Aventis, which was located at 7 th place in the same classification. Sanofi attacked a firm whose value in terms of turnover and staffing was twice its own, but whose market value was comparable. [...]

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