. . .and I fear thou play'dst most foully for it. So Sanofi is really going to get Aventis, and the French government is really going to get their mighty standard-bearer in the drug industry. Bonne chance, guys. I'm not a fan of big drug-company mergers to start with, and this one seems particularly pointless. The Wall Street Journal's coverage sums it up as far as I'm concerned:
"From the start, the battle for Aventis was as much about France's desire to create a home-grown national champion in the pharmaceutical industry as it was about shareholder value and business sense. . .France's intervention in the takeover battle, which runs counter to the free-market principles espoused by the European Union. . ."
"Lip service" translates into all the EU languages, that's for sure. Since when has France ever really been interested in such an Anglo-Saxon concept as a free market? Not when there's national pride at stake, anyway. Look, I understand the desire to have something to point to, to have companies from your own nation be influences on the world. But will this new company be something to be proud of?
The odds are against it. Now that they have this big new Frenchoid drug company (remember, there's a big German contingent, ex-Hoechst), what are they going to do with it? As I've said before, the only way to make the deal make sense, as far as I can see, is for some people to lose their jobs. You know, like most mergers. And since we're certainly not going to have any job cuts in France, and since the German unions have locked their positions up, what's left? (Well, the former Hoechst site in Bridgewater, NJ is left, for one - but if they cut there, this new Francopharma will be doing the complete opposite of all the other major European drug companies.)
Novartis came in at the last minute, but declined to make a bid, which I think was smart of them. Saves a lot of suit jackets from having to be pressed after the French got through twisting their arms, anyway. Novartis's entry may well have driven up the price of the eventual deal, though, and seeing a competitor overpay for an asset must not upset them much, either. If I were more conspiratorial, I'd wonder if that was the whole point of their involvement. . .
