| PARIS/LONDON, Sept 17
PARIS/LONDON, Sept 17 An oil major, a luxury
cosmetics company and independent directors including a former
astronaut will have a key say in what may be the next
multi-billion dollar merger to shake the global pharmaceutical
Sanofi-Aventis (SASY.PA) Chief Executive Chris Viehbacher
wants to buy U.S. based Genzyme GENZ.O, which makes drugs to
treat rare diseases, for $18.5 billion, but may be forced to pay
more in the face of resistance from Genzyme. [ID:nLDE68F05Y]
This means Viehbacher has to keep his own board of directors
The board, which has just lost its flamboyant, long-standing
chairman, is dominated by representatives of top shareholders
Total (TOTF.PA) and L'Oreal (OREP.PA), but is also brimming with
pharma experts brought in via acquisitions.
"What's unusual is the way Sanofi has been cobbled
together," said Harry Korine, who teaches corporate governance
at London Business School and global strategy at French business
"That means you have shareholders who have a very, very
long-term interest in the company, who've known the constituent
parts for decades, and it makes decision-making harder than a
company that's had 20 or 30 years of uniform, organic growth."
Any hopes from Genzyme shareholders for a dramatically
improved bid may hinge on how the internal dynamics of this
disparate board play out.
Both Total and L'Oreal have deep roots in Sanofi-Aventis and
retain influence over management of the company.
Sanofi was owned until 1998 by Elf Acquitaine, which was
later bought by Total. Luxury cosmetics group L'Oreal owned
Sythelabo, which merged with Sanofi that year.
The pair together own about 15 percent of the stock and 27
percent of the voting rights. Current and former L'Oreal and
Total executives represent a third of the board, a fact some
experts say gives the two companies too much influence.
Former L'Oreal chief executive and current chairman Lindsay
Owen-Jones, 64, has sat on the board for roughly 10 years, one
of the longest tenures. He is a legend in French business for
turning L'Oreal from a French haircare specialist into a global
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With him sits L'Oreal finance head Christian Mulliez, 49,
also a pharmaceutical industry veteran, who worked for
Synthelabo for more than a decade.
"He's a pharma guy way before he's a cosmetics guy. He knows
Sanofi inside and out so he is bound to be a board leader, but
he's also a CFO which makes him naturally cautious," said a
Paris-based banker who asked not to be named.
While many market watchers agree L'Oreal and Total dominate
the board, they also say their influence is on the wane.
Both are looking to exit their stakes entirely. Total has
said it will get out by 2012 and L'Oreal will exit if and when
it finds a suitable acquisition.
Total is already scaling back its presence and in July,
53-year-old Total Chief Financial Officer Patrick de la
Chevardiere quietly resigned two years before his term expired.
This leaves current Total Chairman Thierry Desmarest and
former Total CFO Robert Castaigne on the board, but they too are
likely to leave in coming years as Total exits its position.
Jean-Francois Dehecq stepped down as Sanofi-Aventis chairman
recently after building the company over the past 30 years. This
leaves Serge Weinberg, ex-CEO of Fnac to Gucci group PPR
(PRTP.PA), at the head of the board.
Weinberg transformed PPR into a European luxury and retail
giant, won a bidding war for Gucci then didn't blink when
designer Tom Ford walked out the door after a contract dispute.
"Weinberg is a powerful figure and well-connected. I think he
will be a strong chairman of the board. But to me the major
change is the departure of Dehecq. He created that company,"
said Reinhard Angelmar, a professor in marketing at INSEAD.
Because of Dehecq's many mergers, he brought together a
board in which six directors have significant experience in the
pharmaceutical industry. Even Claudie Haignere, a former
astronaut and a former minister in the French government,
started her career as a physician.
Still, Viehbacher said this week he believed Genzyme
shareholders were willing to sell at a "reasonable price" --
indicating he may have enough headroom to strike a deal without
too much boardroom wrangling.
"The board may have set an upper limit on the Genzyme
acquisition price," said Korine, the governance expert. "But
they will have given Viehbacher sufficient headroom to do a
deal. He would never have taken the job in the first place if he
felt he was going to be pushed around."
(Additional reporting by Leila Abboud and Caroline Jacobs;
Editing by David Holmes)