sanofi-aventis to buy Genzyme Corp. for $20.1 billion

PARIS and CAMBRIDGE, Mass.—Ending a months-long standoff over sanofi-aventis' original $69-per-share offer, Genzyme Corp. and sanofi have announced today that they have entered into a definitive agreement under which sanofi-aventis is to acquire Genzyme for $74 per share in cash, or approximately $20.1 billion. The transaction, which has been unanimously approved by the boards of directors of both companies, is expected to close early in the second quarter of 2011, subject to customary closing conditions. The acquisition is expected to be accretive to sanofi-aventis' earnings per share in the first year following closing.

In addition to the cash payment, each Genzyme shareholder will receive one contingent value right (CVR) for each share they own, entitling the holder to receive additional cash payments if specified milestones related to Lemtrada (alemtuzumab MS) are achieved over time or a milestone related to production volumes in 2011 for Cerezyme and Fabrazyme is achieved.

The one-time milestones and payments are as follows:

$1 per CVR if specified Cerezyme®/Fabrazyme production levels are met in 2011
$1 per CVR upon final FDA approval of Lemtrada for multiple sclerosis (MS) indication
$2 per CVR if net sales post launch exceed an aggregate of $400 million within specified periods per territory
$3 per CVR if global net sales exceed $1.8 billion
$4 per CVR if global net sales exceed $2.3 billion
$3 per CVR if global net sales exceed $2.8 billion

"This agreement with Genzyme is both consistent with our long-term strategy and creates significant long-term value for our shareholders," says Christopher A. Viehbacher, CEO of sanofi-aventis. "This transaction will create a meaningful new growth platform for sanofi-aventis while expanding our footprint in biotechnology. We expect it to be accretive from year one, and the CVR structure, which served as an important value bridge between our two companies, rewards both Genzyme and sanofi-aventis shareholders, particularly if Lemtrada outperforms the market's current expectations."

"This transaction represents a new beginning for Genzyme," adds Henri A. Termeer, chairman, president and CEO of Genzyme, noting that sanofi "believes in what we do, in our people and in our potential."

"Genzyme has a record of innovation and a unique and pioneering approach to serving patients," Termeer continues. "We also share an exciting vision of the future, one in which Genzyme and sanofi-aventis grow and innovate by developing breakthrough treatments that change the lives of people with serious diseases. sanofi-aventis We look forward to building a sustainable future together."

The companies expect that sanofi-aventis' global footprint, significant resources and track record of successfully expanding franchises will create new long-term growth opportunities for the combined company, particularly in emerging markets. They say that Genzyme will become "an important new platform in sanofi-aventis' sustainable growth strategy" and expand the company's presence in biotechnology.

In addition, sanofi-aventis intends to make Genzyme its global center for excellence in rare diseases and the acquisition will reinforce sanofi-aventis' commitment to the greater Boston area, where it already has a sizeable presence.

In addition to rare diseases, Genzyme has built strong renal-endocrinology, hematology-oncology and biosurgery businesses that are reportedly complementary to existing sanofi-aventis businesses and "include highly differentiated, market-leading products that provide significant benefit to patients."

Consistent with sanofi-aventis' approach in other transactions, Genzyme will retain its corporate brand.

Genzyme and sanofi-aventis have already begun integration planning, including the formation of a joint steering committee to manage the integration. Termeer will resign from his current roles at Genzyme following the close of the transaction, but will advise on the integration in his new role as co-chairman of the Integration Steering Committee with Viehbacher.

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