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Sanofi chief still wants Genzyme

“Good deals have to create value for both sides,’’ Sanofi chief Christopher A. Viehbacher said. “Good deals have to create value for both sides,’’ Sanofi chief Christopher A. Viehbacher said.
By Robert Weisman
Globe Staff / December 18, 2010

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BRIDGEWATER, N.J. — The chief executive of Sanofi Aventis SA says he is “not surprised’’ that fewer than 1 percent of Genzyme Corp. stockowners accepted his company’s $69-a-share tender offer this fall, but he gave no indication the French drug maker was prepared to sweeten its bid.

In an interview at Sanofi’s US headquarters here, Christopher A. Viehbacher said it would press forward with its effort to buy the Cambridge biotechnology company, though he hinted he was also prepared to walk away if he became convinced the deal didn’t make sense for both parties.

“We have to be very disciplined,’’ Viehbacher said. “This industry has a reputation for overpaying and for not having an appropriate use of capital. And I don’t want to do that. . . . There’s no guarantee of anything. Good deals have to create value for both sides.’’

Sanofi acknowledged in a required regulatory filing Monday that only 0.9 percent of Genzyme shares were tendered by midnight Dec. 10, when the unsolicited offer expired. The company extended the $18.5 billion bid for another five weeks without raising the price. Genzyme’s board has formally rejected the offer, saying it undervalues the company, but its chief executive, Henri A. Termeer, has suggested Genzyme would entertain an offer at a significantly higher price.

Genzyme vice president Bo Piela said yesterday that the company’s position has not changed.

“This is really about price and value,’’ he said. “And our board has concluded that the Sanofi tender offer does not approach the true value of the company.’’

Viehbacher yesterday said he spends only “several hours a week’’ working on the Genzyme takeover bid, devoting the bulk of his time to running the world’s fourth largest pharmaceutical firm, pursuing other acquisitions and alliances, and building a “network of partnerships’’ to develop drugs.

In the latest partnership, unveiled yesterday, Sanofi agreed to a research collaboration with Germany’s Merck KAaG, which itself bought two big companies in Massachusetts, to jointly develop cancer drugs. Much of the research work under the Merck alliance will be done in Cambridge, where Sanofi has based its oncology research, Viehbacher said.

“We’ve clearly demonstrated our commitment as a company to the Cambridge area,’’ he said. “We definitely feel part of the Cambridge community, irrespective of the Genzyme transaction.’’

Viehbacher said only a small number of Genzyme investors agreed to tender their shares because the stock was trading slightly above Sanofi’s offering price. “People fully expected we were going to extend the tender offer, and we were going to extend it as $69,’’ he said. Such jockeying is common in the early stages of takeover campaigns, he said.

Purchasing Genzyme, the largest biotechnology company in Massachusetts, would give Sanofi a strong presence in orphan drugs — treatments for rare diseases — and help it bring its mix of biologics and pharmaceuticals closer to 50-50, said Viehbacher. The business is currently weighted more toward traditional pharma drugs, he said.

While he would not say if Sanofi was considering a proxy fight — appealing directly to shareholders this spring to replace Genzyme board members — Viehbacher said his company was keeping all of its options open.

“There are some pretty well paid advisers on all sides of this transaction, so there are plenty of options,’’ he said.

Robert Weisman can be reached at weisman@globe.com.