Sanofi to launch hostile bid for Aventis

France’s second largest drugmaker, Sanofi-Synthelabo SA, will launch an unsolicited takeover bid for its larger rival Aventis SA on Monday morning, a source familiar with the situation told Reuters.

The offer is likely to value Aventis at more than $60 billion and would create a French national pharmaceutical champion ranking among the top three in the industry, alongside U.S.-based Pfizer and Britain’s GlaxoSmithKline.

Sanofi’s bid for Aventis will be 80 percent in shares and the rest in cash and the company plans to take a two billion euro ($2.54 billion) restructuring charge should its offer succeed, the source added.

The news came after a Sanofi board meeting on Sunday evening.

Sanofi’s main shareholders -- cosmetics firm L’Oreal and oil giant Total -- are joint owners of 44 percent of Sanofi. They met at the weekend to discuss Sanofi’s plan.

The decision to launch a bid follows weeks of merger speculation, which has driven shares in both companies higher as investors welcomed the prospect of cutting costs, combining sales forces and pooling drug pipelines.

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Strasbourg-based Aventis sees no need to merge at present and is preparing to defend itself against the hostile approach, sources close to the company told Reuters earlier.

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The Franco-German firm believes its shares are significantly undervalued and argues that a hostile bid battle -- rare in the drugs sector -- would damage both firms.

But the French government favours an alliance that would create a national standard-bearer in a science-driven industry and that could spark a new wave of mergers and acquisitions in Europe’s healthcare sector.

Sanofi will hold a news conference on Monday at 0900 GMT, the source said.