CSL makes Aventis a blood brother

BLOOD products group CSL proved timing is everything today with the announcement that it will buy bigger rival Aventis Behring for almost £400m, making it the world's largest firm of its kind.

The move will double the sales of Australia's CSL at a time when the key US market is emerging from a supply glut that has driven many rivals out of the market.

Now the slimmed-down industry is expected to be given a kick-start as prices start rising next year.

Aventis Behring has annual sales of e1bn (£706m) and is about twice the size of CSL's ZLB arm, which it bought from the Swiss Red Cross for £224m in 2000.

CSL, which began life in 1916 as the State-owned Commonwealth Serum Laboratories, has a long history in the bio-medical arena, becoming one of the first companies to bring insulin to the market in 1923 and the first producer of penicillin for the general population in 1944.

In its current form, it listed on the ASX in May 1994, with an opening price of A$2.42. It was suspended today due to the announcement, but closed yesterday at A$16.50.

While analysts expect investors to greet CSL's announcement positively when trading resumes, it was not there to support a drifting market today. The All Ordinaries index fell 6.7 points, or 0.21%, to 3219.5. Traders said local investors were sitting on their hands, waiting for a lead from Wall Street. The Aussie dollar, which continues to surge, has also raised fears of earnings, particularly among the miners.

Richard Branson's no-frills airline Virgin Blue was a winner for a second day, and the most active stock. It rose 3.7% to A$2.52.

Gloom surrounding news of another writedown for AMP on UK woes drove those shares down 3% to A$5.69.

In Hong Kong, shares were in positive territory after yesterday's falls. The Hang Seng index was up 149 points, or 1.2%, at 12,326.5, with blue-chips the focus of buying.

An exception to that was Johnson Electric Holdings, the world's second-largest micromotor maker, which slipped 1.94% to HK$10.10 after posting worse-than-expected results for the first half of its year.

By contrast, Chinese truck and sport utility vehicles maker Great Wall Automobile Holding looks set to make a solid debut and raise HK$1.5bn (£111m) after its listing price was set at HK$13.30, near the top of an indicated range.

Great Wall's success bodes well for future floats in Hong Kong where appetite for initial public offerings is ravenous.

In Tokyo, the Nikkei 225 Average - hit by a 3.2% slump yesterday - closed up 78.94 points, or 0.8%, at 10,124.28. Toyota rose in line with other exporters, up 0.6% at 3430 yen. But consumer electronics giant Sony extended its recent gloom with a 0.28% fall to 3590 yen. Other tech firms were unable to shake off concerns about the rising yen. Fujitsu fell 1.03% to 579 yen, after a 7.3% fall yesterday.

In Singapore, the Straits Times index was up 1.6 points at 1720.97, a 0.1% rise. Volume was low as investors waited for the verdict of the Federal Reserve Open Market Committee on US interest rates today, although property firms did well, with City Developments rising 1.69% to S$6.00 and Capitaland up 1.95% at S$1.57.

Creative Technology compounded yesterday's losses, despite an early rally, trading down 0.56% at S$17.90, while Singapore Telecom was one of the best performers, rising 2.79% to S$1.84.