Case Study 11.2

Sanofi Acquires Genzyme in a Test of Wills

1. The deal was structured as a tender offer coupled with a top-up option to be followed by a back-end short-form merger. Why might this structure be preferable to a more common statutory merger deal or a tender offer followed by a back-end merger requiring a shareholder vote?

2. Speculate as to the purpose of the dual-track model in which the bidder initiates a tender offer and simultaneously files a prospectus to hold a shareholders meeting and vote on a merger.

3. Describe the takeover tactics employed by Sanofi. Discuss why each one might have been used.

4. Describe the anti-takeover strategy employed by Genzyme. Discuss why each may have been employed. In your opinion, did the Genzyme strategy work?

5. What alternatives could Sanofi have used instead of the CVR to bridge the gap in how the parties valued Genzyme? Discuss the advantages and disadvantages of each.

6. How might both the target firm and the bidding firm benefit from the top-up option?

7. How might the existence of a CVR limit Sanofi