9781118041581

Sanofi’s Bid

for Genzyme

630

CHAPTER 15

Bargaining and

Negotiation

To get to the Promised Land, you have to negotiate your way through the

wilderness.

H. COHEN

In Spring 2010, Christopher Viehbacher, CEO of the French pharmaceutical giant,

Sanofi-Aventis SA, set his sights on acquiring Genzyme Corporation, a pioneering

biotechnology company based in Cambridge, Massachusetts. A year and a half on the

job, Viehbacher’s mandate was to turn around Sanofi by cutting costs and finding

new sources of revenue to replace the loss in sales from its series of drugs losing their

patent protection. Known for its research, Genzyme had a number of profitable drugs

in its sales pipeline (particularly ones treating rare diseases) and a potential block-

buster drug in development for treating multiple sclerosis. However, in the past year

Genzyme’s profit and stock price had taken huge hits due to contamination prob-

lems that temporarily shut down its main production site.

Throughout 2010, Viehbacher carried out secret talks with Henri Termeer, the

CEO of Genzyme. However, Vehbacher’s irresistible force was met by Termeer’s

immovable object. Backed by his directors, Termeer, who had been with the company

since its creation, saw no economic reason for Genzyme to be acquired. Moreover, the

two sides could not come close to agreeing on Genzyme’s proper valuation and on a

mutually agreeable sale price. Finally, in October 2010, Sanofi announced a hostile

takeover bid for Genzyme at a price of $69 per share, some 38% above the company’s

stock price in previous months. But Termeer, Gynzyme’s board, and its shareholders

showed no interest in selling out at that price.

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