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NEWSMAKER-Sanofi's new broom CEO gets serious on M&A
Thu, 29th Jul 2010 17:21
By Ben Hirschler and Caroline Jacobs
LONDON/PARIS, July 29 (Reuters) - After 20 months in the job, Sanofi-Aventis Chief Executive Chris Viehbacher is hungry for a deal -- but Genzyme investors looking for a rich pay-out can expect him to play a careful hand.
The 50-year-old dual German-Canadian national has been around the block a few times in the drugs industry. He spent 20 years at GlaxoSmithKline before being passed over for CEO at the British group following a close fight.
He jumped ship in 2008 to become the first non-French CEO at Sanofi's headquarters on the banks of the Seine in Paris.
A relaxed and easy talker, he has plenty of fans among investors who see him as an catalyst for needed change at Sanofi. The deft handling of his own career also shows a shrewd operator at work.
Viehbacher made clear on Thursday he was not going to overpay for acquisitions, while declining to comment on specific deals, after sources familiar with the matter said Sanofi was readying a bid of up to $18.7 billion for U.S. biotech firm Genzyme.
Industry watchers say he has picked his target carefully by zeroing in on an asset with problems that are soluble, but may deter other bidders, and a price tag that fits his budget.
'I would put him at the more cautious end of the spectrum when it comes to M&A,' said Ben Yeoh, an industry analyst at Atlantic Equities.
'Genzyme is something of a special case because they've struggled to resolve their manufacturing problems and one could argue that an outside player might do a better job.'
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Stories on Sanofi's plan to buy Genzyme
Graphic on Genzyme and pharma and biotech valuations:
http://graphics.thomsonreuters.com/F/07/GLB_SNGZ0710.gif
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One banker said Viehbacher -- a chartered accountant by training -- was anxious not to repeat the mistake of European rival AstraZeneca, which was accused of overpaying for another U.S. biotech company, MedImmune, in 2007.
Since arriving at Sanofi he has been on a mission to inject an Anglo-Saxon culture into a bastion of French business.
He has overhauled research and development -- ditching many products in the process -- and slashed the layers of the research department to six from 11.
'SMILING KILLER'
Some employees have dubbed him the 'Smiling Killer' because of plans to shed 4,000 positions by 2013. But he has scored well with the investment community, which has appreciated his clear talking and down-to-earth strategy,
including a targeted focus on external growth as one of the company's top three priorities.
So far, those external deals have come in the form of licensing agreements and small acquisitions in consumer health, emerging markets, vaccines and licensing deals.
Buying Genzyme would be in a different league and the biggest deal for Sanofi since its merger with Aventis in 2001. Yet it would still fit into Viehbacher's oft-repeated game plan of making acquisitions worth up to $20 billion in market value.
Some analysts question whether giving clear guidance on deal size could box Viehbacher in to a sub-optimal transaction.
'I'm afraid if he's limiting himself to things that are not more than $20 billion then it's quite hard to see he's going to buy something that will make enough of a difference,' said Paul Diggle, an industry analyst at Ambrian Partners.
'Genzyme's not a bad fit for them but even if Genzyme returns to full profitability and makes a net contribution fairly quickly, it's not going to be enough to really give Sanofi the growth it is hoping for. It is part of the solution.'
Last year, Viehbacher did more than 30 bolt-on transactions worth about $9 billion. This year he has done only $3 billion to date -- arguably leaving headroom for a larger deal.
Viehbacher has had plenty of pitches from bankers offering opportunities. With a well-flagged 'cliff' of looming drug patent expiries and strong cash position, Sanofi has long been touted as an obvious buyer of smaller drug companies.
He has bided his time, but he has also built close ties with a few external advisers.
He is being advised on Genzyme by Evercore Partners -- the same firm that handled Sanofi's animal health tie-up with Merck & Co -- and has lined up financing from banks including JP Morgan and BNP Paribas, according to banking industry sources.
Genzyme is being advised by Goldman Sachs and Credit Suisse, the sources added.
Married with three children, Viehbacher is fluent in French, English and German.
(Additional reporting by Jessica Hall in Philadelphia; Editing by Andrew Callus) Keywords: GENZYME/SANOFI VIEHBACHER
(ben.hirschler@thomsonreuters.com; Tel: +44 20 7542 5082; Reuters Messaging: ben.hirschler.reuters.com@reuters.net; www.twitter.com/reutersBenHir)
COPYRIGHT
Copyright Thomson Reuters 2010. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
LONDON/PARIS, July 29 (Reuters) - After 20 months in the job, Sanofi-Aventis Chief Executive Chris Viehbacher is hungry for a deal -- but Genzyme investors looking for a rich pay-out can expect him to play a careful hand.
The 50-year-old dual German-Canadian national has been around the block a few times in the drugs industry. He spent 20 years at GlaxoSmithKline before being passed over for CEO at the British group following a close fight.
He jumped ship in 2008 to become the first non-French CEO at Sanofi's headquarters on the banks of the Seine in Paris.
A relaxed and easy talker, he has plenty of fans among investors who see him as an catalyst for needed change at Sanofi. The deft handling of his own career also shows a shrewd operator at work.
Viehbacher made clear on Thursday he was not going to overpay for acquisitions, while declining to comment on specific deals, after sources familiar with the matter said Sanofi was readying a bid of up to $18.7 billion for U.S. biotech firm Genzyme.
Industry watchers say he has picked his target carefully by zeroing in on an asset with problems that are soluble, but may deter other bidders, and a price tag that fits his budget.
'I would put him at the more cautious end of the spectrum when it comes to M&A,' said Ben Yeoh, an industry analyst at Atlantic Equities.
'Genzyme is something of a special case because they've struggled to resolve their manufacturing problems and one could argue that an outside player might do a better job.'
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Stories on Sanofi's plan to buy Genzyme
Graphic on Genzyme and pharma and biotech valuations:
http://graphics.thomsonreuters.com/F/07/GLB_SNGZ0710.gif
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
One banker said Viehbacher -- a chartered accountant by training -- was anxious not to repeat the mistake of European rival AstraZeneca, which was accused of overpaying for another U.S. biotech company, MedImmune, in 2007.
Since arriving at Sanofi he has been on a mission to inject an Anglo-Saxon culture into a bastion of French business.
He has overhauled research and development -- ditching many products in the process -- and slashed the layers of the research department to six from 11.
'SMILING KILLER'
Some employees have dubbed him the 'Smiling Killer' because of plans to shed 4,000 positions by 2013. But he has scored well with the investment community, which has appreciated his clear talking and down-to-earth strategy,
So far, those external deals have come in the form of licensing agreements and small acquisitions in consumer health, emerging markets, vaccines and licensing deals.
Buying Genzyme would be in a different league and the biggest deal for Sanofi since its merger with Aventis in 2001. Yet it would still fit into Viehbacher's oft-repeated game plan of making acquisitions worth up to $20 billion in market value.
Some analysts question whether giving clear guidance on deal size could box Viehbacher in to a sub-optimal transaction.
'I'm afraid if he's limiting himself to things that are not more than $20 billion then it's quite hard to see he's going to buy something that will make enough of a difference,' said Paul Diggle, an industry analyst at Ambrian Partners.
'Genzyme's not a bad fit for them but even if Genzyme returns to full profitability and makes a net contribution fairly quickly, it's not going to be enough to really give Sanofi the growth it is hoping for. It is part of the solution.'
Last year, Viehbacher did more than 30 bolt-on transactions worth about $9 billion. This year he has done only $3 billion to date -- arguably leaving headroom for a larger deal.
Viehbacher has had plenty of pitches from bankers offering opportunities. With a well-flagged 'cliff' of looming drug patent expiries and strong cash position, Sanofi has long been touted as an obvious buyer of smaller drug companies.
He has bided his time, but he has also built close ties with a few external advisers.
He is being advised on Genzyme by Evercore Partners -- the same firm that handled Sanofi's animal health tie-up with Merck & Co -- and has lined up financing from banks including JP Morgan and BNP Paribas, according to banking industry sources.
Genzyme is being advised by Goldman Sachs and Credit Suisse, the sources added.
Married with three children, Viehbacher is fluent in French, English and German.
(Additional reporting by Jessica Hall in Philadelphia; Editing by Andrew Callus) Keywords: GENZYME/SANOFI VIEHBACHER
(ben.hirschler@thomsonreuters.com; Tel: +44 20 7542 5082; Reuters Messaging: ben.hirschler.reuters.com@reuters.net; www.twitter.com/reutersBenHir)
COPYRIGHT
Copyright Thomson Reuters 2010. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
