Company News

Sanofi shares up on talk of Pfizer buying stake

LONDON (Reuters) - Shares in French drugmaker Sanofi-Aventis SASY.PA jumped 3 percent in a weaker market on Monday on rumors Pfizer PFE.N was looking to buy stakes in the group from Sanofi's major shareholders.

The move, if confirmed, could be seen as a prelude to a full bid for Sanofi by U.S.-based Pfizer, which is already the largest pharmaceutical manufacturer in the world but has seen its growth flag recently on slowing sales of older medicines.

Acquiring Sanofi, whose fortunes have also been hit recently by product setbacks, would be a huge deal as Sanofi’s market capitalization is around 83 billion euros ($117 billion).

Oil company Total TOTF.PA and cosmetics firm L'Oreal OREP.PA, which jointly own about 23 percent of Sanofi's share capital, have previously made it clear they do not consider their stakes strategic.

Total said in August that it would sell its 13 percent stake in Sanofi-Aventis progressively.

L’Oreal said in June the sale of its stake of around 10 percent in Sanofi was not imminent and its position had not changed after Sanofi won a U.S. patent trial on its blockbuster bloodthinner drug Plavix.

Officials at Pfizer, Sanofi, L’Oreal and Total all declined to comment on what they said was market speculation.

Talk of Pfizer’s interest in Sanofi is not new. The New York group was rumored to have approached Total about its stake in Sanofi four years ago, before Sanofi swooped on Aventis to create today’s enlarged company.

“It would seem to make sense from a therapeutic perspective,” commented Mark Purcell, an industry analyst at Deutsche Bank.

“The cardiovascular franchise would sit quite nicely with that of Pfizer and the CNS (central nervous system) business fits in with where Pfizer’s research is trying to re-emerge. It makes sense -- but it’s just a rumor at the moment and it would be a very large acquisition.”

On Monday, shares in Total were down 0.5 percent and L’Oreal rose 0.4 percent. Pfizer shares were 0.7 percent weaker.

Additional reporting by Sitaraman Shankar and Blaise Robinson, with Nick Antonovics in Paris and Bill Berkrot in New York