Aventis Succumbs to Sanofi-Synthelabo Takeover

Updated from 8:54 a.m. EDT

French-German drugmaker Aventis(AVE Quote) has given up the fight and agreed to be acquired by France's Sanofi-Synthelabo (SNY Quote), triggering declines in the shares of both companies.

The sweetened cash-and-stock deal, which came together Sunday, is worth about $55.3 billion euros, or $65.34 billion, and creates the world's third-largest drugmaker, behind Pfizer (PFE Quote) and GlaxoSmithKline (GSK Quote). The offer is worth 66.63 euro, or about $79.29, a share.

Aventis had been resisting a deal since late January, when Sanofi first offered 47.8 billion euros, or approximately $60 billion, which it rejected as inadequate.

Switzerland's Novartis (NVS Quote), which Aventis had courted as a possible white knight, decided not to bid, even though it made a public statement last week saying it was involved in negotiations to buy or merge with the French-German company.

Aventis shares fell $5.04, or 6.3%, to $74.72, while Sanofi's slid $1.86, or 5.7%, tO $30.97 in U.S. trading. Novartis shares, however, jumped $2.24, or 5.3%, to $44.67, close to their 52-week high.

Sanofi's takeover play had the support of the French government, which wanted to create a so-called national champion in the drug sector.

The deal will deliver about $1.89 billion in cost savings, or what Sanofi called "synergies," by 2006.