Chapter 5: Managerial Reasoning in Takeover Battles: The Case of Sanofi-Synthélabo and Aventis
Axel v. Werder and Till Talaulicar INTRODUCTION On 26 January 2004 the pharmaceutical company Sanofi-Synthélabo announced an unsolicited tender offer to acquire all of the shares of its competitor Aventis. Based on sales Aventis was twice as large as the bidder. Although both the management board and the supervisory board of Aventis rejected this offer immediately, Sanoﬁ-Synthélabo maintained its attempt to gather control over its competitor. A takeover battle began. It followed an intensive and expensive corporate campaign to gain shareholders’ support for each company’s respective and conﬂicting strategy. In particular the two companies intended to convince their shareholders and the general public of their respective position. In other words, they were putting forward arguments that gave reasons why their recommendation was preferable and the opposing strategy should be refuted. Eventually Aventis’s top management dismissed its defence. After Sanoﬁ-Synthélabo had ﬁled an improved offer, both the management board and the supervisory board of Aventis agreed to cooperate and recommended their shareholders to accept the new offer. By August 2004 Sanoﬁ-Synthélabo had taken control of more than 95 per cent of Aventis’s shares and voting rights. Thus the offer succeeded. Mergers and acquisitions (M&As) are not an uncommon phenomenon studied from, inter alia, economic (Ghemawat and Ghadar 2000), capital market (Jensen and Ruback 1983), strategic management (Lubatkin and Lane 1996) or organizational behaviour (Jemison and Sitkin 1986) perspectives. Regarding corporate governance, M&As and particularly hostile takeover bids are the most important...
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