Hostile Take Over or Sound, Sustainable Business Strategy?
By Lavinia Weissman
The Boston Globe published an article on Monday, October 4, 2010, titled “Sanofi-Aventis launches take over battle with Genzyme.”
On July 29, 2010, Sanofi-Aventis offered a fair price bid price for the purchase of Genzyme. On August 30, Genzyme confirmed it received an unsolicited bid of $69.00 per share. The bid was turned down by Genzyme’s CEO Henri Temeer.
Mergers among the Fortune 500 are increasing; for example, Pfizer acquired Wyeth and Merck acquired Schering-Plough. Acquisitions and mergers usually involve some form of workforce reduction, management of corruption and, of course, higher profits. Is there something different about Sanofi’s bid for Genzyme?
CEO Christopher A. Viehbacher came to Sanofi from GlaxoSmithKline in December 2008. His priority was to respond to declining profits occurring with the patent expirations of key drugs in 2013.
Viehbacher chose to accelerate CSR as a core strategy with a mission to improve the health of the world’s 6.8 billion citizens. Sanofi-Aventis’ 2009 Sustainability Report outlines an overview of programs in research and development that have a patient-centric focus.
Sanofi is now an emerging leader in global markets in Latin America, Africa, Russia, India, China and South Korea. Annual global sales total € 29.3B (euros), making Sanofi the 3rd largest pharmaceutical company. Sanofi-Aventis has strengthened operations and organized itself to take innovation and research to market, drawing on its active participation in the UN Global Compact since its establishment in 2000.
While Genzyme is innovative in regards to research and development for cancer and other illnesses, it has proven to be weak in sustainability. A viral outbreak, a plant shutdown, low inventories and a $175M FDA fine disrupted Genzyme’s operations and reduced its share value to as low as $45. Bid rumors added value to a shaky year for Genzyme and increased its value per share to $71.
This invites the question:
Is Sanofi-Aventis’ bid for Genzyme simply another hostile take over or a bid for a sustainable core business strategy?
About Lavinia Weissman
Lavinia Weissman (@workecology) is a Sustainability Leadership Coach and Social Media Practitioner. Her practice is dedicated to embedding into projects the education (briefing, visioning and application) of values CSR and Sustainability principles. Weissman views embedding CSR education as critical to launching a core business or philanthropic social strategy to meet any form of sustainable reporting requirements for ESG, CSR or SR Investing.
Talkback Readers: What do you think is going on? Share your comments on Talkback!