£34bn bid in the wings for Aventis

FRANCO-GERMAN pharmaceuticals group Aventis was today bracing for a hostile takeover bid worth e50bn (£34bn) or more from France's Sanofi-Synthelabo.

Aventis has reportedly engaged Goldman Sachs and Morgan Stanley to fight the bid as Sanofi, advised by Lazard, fine tunes its preparations.

A merger would create the world's third-biggest pharmaceuticals group with a market capitalisation of about e90bn, behind Pfizer and GlaxoSmithKline.

The companies have repeatedly denied any talks but the board of cosmetics group L'Oreal, which owns 19.5% of Sanofi, meets tomorrow, apparently to debate whether to support a hostile-offer by Sanofi. Total, which holds 24.4% of Sanofi, is understood to back such a bid, which would give it a chance to sell down its stake.

Buying Aventis would allow Sanofi to improve distribution of its drugs portfolio and achieve cost savings estimated at e920m a year by Paris broker Exane, which says that combining the groups could boost earnings before interest and tax by e800m a year.

Aventis shares today put on 1.6% to e57.50, leaving them up more than 7% on the week so far. Sanofi slid 5.5% to e58.65, down 1.6% this week.