Swiss pharmaceutical giant Novartis has lost out in its bid to take over the French-German Aventis group.
On Sunday evening Aventis accepted an improved $63.8 billion (SFr83 billion) offer from its French rival Sanofi-Synthélabo.
The deal – which if approved by Aventis shareholders will create the world’s third-largest drug company – is a snub to Basel-based Novartis, whose approaches were resisted by the French government.
The French prime minister, Jean-Pierre Raffarin, welcomed the agreement, clinched over the weekend after Sanofi improved its original offer by around 14 per cent.
“The merger between Sanofi and Aventis will allow the preservation of…jobs in France and Europe,” Raffarin said in a statement.
The European Commission said on Monday it saw no reason to take legal action against France for intervening in the merger.
"If the French government had taken measures to block a takeover by Novartis, we would have had to examine the compatibility of these measures with the free movement of capital," said commission spokesman, Jonathan Todd.
"No such measures were actually taken. In the absence of such measures, we cannot act against words," he added.
The deal comes just days after Novartis revealed it was ready to begin merger talks with Aventis in a deal that would have created the world’s second-largest pharmaceutical firm.
Reacting to news of the Aventis-Sanofi tie-up, Novartis denied it had ever submitted a formal “white knight” offer for the French firm.
Chairman and CEO Daniel Vasella told France's "Le Monde" newspaper that there was only one winner in the whole saga - Aventis.
"It is a victory for Aventis which could turn out to prove very costly for Sanofi," he said, adding that the future would show whether Sanofi had paid over the odds.
France to blame
Vasella also made it clear that the French government was to blame for its failed takeover bid.
"The economics ministry realised that we were determined not to be intimidated," he said. "Therefore it set about putting pressure on Aventis and on Sanofi-Synthélabo, and it did this in a very forceful way."
The Swiss pharmaceuticals firm did not rule out other acquisitions in the future.
But the company said it was in no hurry to expand and would not bid for rival firms “at any price”.
“What is extremely important is that one maintains certain principles, that you are straight and that in discussions you keep these principles up and you don’t get seduced into stupid things,” said a spokesman for the company.
swissinfo with agencies
The Aventis-Sanofi merger will create Europe's biggest and the world's third-largest pharmaceutical company.
The deal - brokered over the weekend - comes just days after Swiss firm Novartis announced its intention to start takeover talks with the French-German company.
Novartis blames the intervention of the French government and says it will not launch a counter-bid.
In compliance with the JTI standards