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European Drug Giants Talk Merger

November 25, 1998

FRANKFURT, Germany (AP) _ Two of the biggest drug companies in Europe, Hoechst of Germany and Rhone-Poulenc of France, confirmed today that they are discussing a merger that would create one of the world’s largest pharmaceutical firms.

The talks have been under way for months, and industry sources said today’s acknowledgement could signal a final annoucement could be just days away.

But Hoechst cautioned that ``no guarantee can be made as to the outcome of the current discussions.″

Analysts believe the merger would improve the companies’ market share, while enabling the combined firm to realize huge savings in the pharmaceutical sector by fusing areas where they overlap, including cancer and allergy treatments.

The pharmaceutical company would be based in Frankfurt and headed by Richard Markham, chief executive of Hoechst’s pharmaceutical division Hoechst Marion Roussel.

The joint company’s agrochemical activities would be based in Lyon, France, and headed by Alain Godard, the current chairman of Rhone-Poulenc’s plant and animal health division.

Sources familiar with the talks also said that Hoechst would have to get the go-ahead from German pharmaceutical maker Schering, with which it shares a pesticide joint venture.

Hoechst’s annual sales are estimated at about $13.75 billion, with Rhone-Poulenc at $11 billion. The two companies together employ 180,000 people.

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