Sanofi to buy Genzyme

In addition to the cash payment, each Genzyme shareholder will receive one contingent value right (CVR) for each share they own, entitling the holder to receive additional cash payments if specified milestones related to Lemtrada are achieved over time or a milestone related to production volumes in 2011 for Cerezyme and Fabrazyme is achieved.

The deal is struck after a lengthy stand-off (nearly nine months) between Genzyme CEO Henri Termeer and Sanofi CEO Chris Viehbacher.

The debate arose when Genzyme rejected Sanofi’s offer of buying its shares for $69 per share as it felt Sanofi was taking advantage of its troubles and an artificially depressed share price.

There was also major disagreement on their respective expectations regarding annual sales figures for Lemtrada.

Sanofi-aventis’ global footprint and resources are expected to offer growth opportunities for the combined company, particularly in emerging markets.

Sanofi-aventis intends to make Genzyme its global center for excellence in rare diseases.

Consistent with sanofi-aventis’ approach in other transactions, Genzyme will retain its corporate brand.

Viehbacher said the transaction will create a meaningful new growth platform for sanofi-aventis while expanding our footprint in biotechnology.

"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," Viehbacher said.

Termeer said they share an exciting vision of the future, one in which Genzyme and sanofi-aventis grow and innovate by developing breakthrough treatments that change the lives of people with serious diseases.