You are either going to see the rationale behind this or not so I will not go into a historical perspective nor a analytical thesis of the merits of my point. Bottom line, Sanofi is preparing to trim down its size, disenfranchise its workforce, sell off any promising new compound ( phase 1 & 2) and sell the company. It will be either an outright sell ( in very simple terms-this sale would be very complex) or allow a merger with a more "successful " company. Either way, few will have their jobs . If they don't loose it by the current state of uncertainty surrounding the product portfolio, or lack thereof, the sale of Sanofi will be the end of employment. Either will occur in the next 3-6 months. It will be fast and sudden as secrecy will be the order of the day in the boardroom.
Sounds VERY PROMISING!!! Can't happen soon enough as long as a severance is involved. I would love to have the summer to shake off this nasty place! Please keep us informed!
Speaking as someone with a corporate finance background, including many billions of closed transactions, I can tell you that you are both right and wrong. 1. You are correct that Sanofi is fodder for an acquisition. The pipeline is pathetic and most of the patent protected drugs are losing that protection sooner rather than later. 2. Unless the price does a complete crash and burn, the market capitalization of more than $100 billion means that the company is still significantly overvalued. It is hard to get an acquisition done without a significant premium and there are few companies stupid enough to pay up $125 billion or more. So your basic premise that Sanofi will be broken up or gobbled up whole is almost certainly true. However, your time line of 3-6 months is woefully underestimated; I would put it at 2-3 years unless the price falls to $15/share sooner than that. Always remember that the CEO who buys Sanofi has to explained to his board and his shareholders why he thought spending $125 billion for a dud company was a good use of company resources. That is a much easier explanation with a $50 billion price tag.
My position was that the initial discussions would begin in 3-6 months, in secret , behind the closed doors of the boardroom. Yes, the financial, legal, and logistical realities of sale or merger would take longer but not 2-3 years if the acquiring Co. was European. Significant cost cutting ( jobs) would start occurring right after the "board" decides to sell or be acquired. I think the next round of cuts comes this spring due to the product portfolio challenges with further cuts once and if the decision to be acquired/sold is made by the board.
They cannot wait 2-3 years. No way. The value would be so decimated barring some kind of miracle that they would sell for nothing. I think more likely is cv diabetes division gets sold off and the rest stays Sanofi. They will probably change the name though. I would.
Discussions always take place behind closed doors (but not always in the boardroom). Once a company decides to go after another, the process rarely takes more than 6 weeks to unfold and many deals get done in a few weeks. In any event, no company takes action on downsizing or other changes until they have a deal signed and sealed unless the board has decided to put the company up for sale. In that case, they do so very visibly and the whole world knows about it because they skinny down the company and announce that they have engaged an investment bank "to explore strategic alternatives". At any rate, I doubt the buyer will be European. Both Glaxo and the large Swiss pharmas are not interested in the portfolio, AZ is a likely acquisition target itself, and Bayer is reducing emphasis on pharma and moving back into agriculture where they started, Everybody else in Europe is too small to handle a transaction of this size.
French government would not let sanofi be bought at time of Aventis merger. Novartis was going to buy Aventis and French gov pushed the French banks into overpaying(35B?) thereby keeping a larger pharmaceutical presence in France. Sanofi was formed from 350 smaller companies by Emperor Deheq who then made it one company and joined w Aventis to be #3 in world with 10,000 reps in US.
Interesting idea, and would make sense except for one thing. Sanofi is French owned and vital to the French economy; a prideful piece of French business, at least so deems the French government. The French (this is actual socialism and economic protection) will not allow for Sanofi to be purchased by an external (outside of France) company. The purchaser would have to be a French company; outside of L'Oréal, I don't know who is bigger than Sanofi or has enough capital to purchase a 100+bb company. It is intriguing though as the future seems cloudy here.
Deheq was the best, once they kicked him out the company went to shit. His philosophy was to take the best care of the people who bring the company the $$$$ aka sales reps. I had the best bonuses ever, full budgets and was treated like gold. Once he was ousted everything came crumbling down.
Except Deheq was directly responsible for Accomplia, a 12 billion dollar loss. The company was never the same after that loss.
Accomplia cost Deheq his job. He ramped up sales teams thinking this would be a slam dunk to FDA. Went from PCP1-2-3 to 4-5-6-7. FDA voted 14-0 against approval and Deheq kept sales team lingering for 2 years just draining company. His ego got the best of him. It's been a complete clown show of leadership since. In any other industry the leaders Sanofi has had is embarrassing and would be fired for incompetence.
Agree. The French are a very proud egocentric race. They see Sanofi as a French institution that is essential to their national security. Sanofi is too big to fail. Worst case it would go into a Francophile receivership. The United States and maybe Japan are 2 markets they will never leave.
Twenty year ago it was still OK to have "national champions" in Europe, even ten years ago in some circumstances. Now it is almost impossible for a country to block a cross border merger in the EU and it has likewise gotten harder for an EU company the size of Sanofi to get any subsidies of any sort. Sanofi is in that difficult period where they are the only remaining French pharma worth talking about, yet are not in dire straights financially. It is kind of like being a well-off Greek bank (if such a thing existed). Ultimately it comes down to who owns Sanofi, and increasingly that is not the French themselves. It will take a while, but Sanofi cannot continue as a global competitor on its own.
