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Hostile takeover bid for drug firm riles Germans

Franco-German friction: * The French-German pharmaceutical group Aventis has rejected a 46-billion-euro hostile bid from the French company Sanofi-Synethelabo. * Sanofi's advertisements backing its bid have been condemned in Germany. * A takeover could result in up to 12,000 job losses worldwide, according to a source close to Aventis. * The German government looks likely to step in to try to reduce job losses and protect research projects.

An advertising campaign by French drug company Sanofi-Synethelabo lauding its hostile takeover bid for French-German pharmaceutical group Aventis on "health grounds" has come under fire in Germany over the controversial use of a picture of an ailing child.

The advertisements published in the French, German, British and Spanish press carry a picture showing the sad face of a child lying on a hospital bed with the caption: "Who will tell Louis that the medicine which can cure him will be available only in 20 years. You? No."

Aventis rejected Sanofi's 46-billion-euro (US$457 billion) hostile bid earlier this week, with Aventis chief executive Igor Landau saying the offer would only be interesting if it were raised 40 percent to 50 percent.

The campaign touched off a furor in Germany.

The Deutsche Werberat association, which groups several advertising agencies, blasting it as "disloyal and immoral" and considering suing Sanofi-Synthelabo.

The hostile bid launched by Sanofi-Synthelabo for Aventis could also possibly become a source of political friction between France and Germany.

The German government has already entered the fray in a bid to defend Aventis' German roots and labor unions and some political figures are claiming the move has been orchestrated by Paris.

The issue has indeed gone to the very top and German Chancellor Gerhard Schroeder said last week he did not rule out the matter being brought up when he meets French President Jacques Chirac on Feb. 9.

Schroeder's Economy Minister Wolfgang Clement has warned that Germany should not have to bear the brunt of any job cuts that might arise as part of the takeover.

The issue had already been discussed by the Cabinet and the government would defend the interests of Germany and German employees "at all possible levels," Clement said, underlining the importance of Aventis' research activities for Germany.

Aventis, born in 1999 as a result of a merger between German chemicals giant Hoechst and French pharmaceuticals specialist Rhone-Poulenc, employs around 9,000 people in Germany, most of them in and around Frankfurt in the central state of Hesse.

Germany is particularly concerned with the fate of around 1,500 top-level German researchers.

"I fear a catastrophe" at a social level, said the head of the employees council of Aventis Germany, Friedhelm Conradi.

A takeover could result in up to 12,000 job losses worldwide, said a source close to Aventis.

Comments by Sanofi chief Jean-Frangois Dehecq, who promises "to be a good boss in Ger-many" or by French government spokesman Jean-Francois Cope, who said he would "keep in mind" the employment issue, are anything but reassuring.

The regional parliament inHesse unanimously voted a resolution asking Berlin to intervene with the French government to halt the bid.

Hesse state premier Roland Koch said the takeover was "obviously a coordinated project [with] the French government."

And the head of the chemicals sector labor union IG BCE, Hubertus Schmoldt, an ally of Chancellor Schroeder, suggested French politicians were involved in preparing the way to set up a French global pharmaceuticals player.

Schroeder may not remain deaf to such pleas for help. During his time in office, he has several times come to the defense of failing companies or potential takeover targets.

He was severely critical for example of the takeover of German telecommunications group Mannesmann by British mobile phone operator Vodafone in 1999.
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