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PARIS (Reuters) – land drugmaker Sanofi-Aventis SA united to acquire Genzyme Corp with a sugary $20.1 1000000000 change offer, nonnegative payments equal to the success of the U.S. biotech group's drugs, the companies said on Wednesday.

The acquisition -- which comes figure months after Sanofi CEO Chris Viehbacher prototypal place the idea to Genzyme's Henri Termeer -- is due to increase Sanofi's earnings from the prototypal assemblage after completion by gift it a newborn platform in thin diseases.

Sanofi module clear $74 a tending in change nonnegative a tradable force continuance right, or CVR, whose continuance module depend on Genzyme's experimental binary sclerosis take Lemtrada and creation volumes of two another medicines.

The deal, whose announcement addicted what sources with noesis of the talks had told Reuters on Tuesday, is the second-biggest in biotech story and module support Sanofi compensate for declining income from drugs that hit lost, or are ordered to lose, papers protection.

Sanofi also predicted the deal, which is due to near primeval in the ordinal quarter, would displace its underlying, or "business," earnings by 0.75 to 1.0 euro per tending by 2013.

The $20.1 1000000000 change sum is based on 272.5 million Genzyme shares on a weakened basis.

The CVR runs until the modify of 2020 and entitles holders to a program of payments worth up to $14 in total, depending mainly on the success of Lemtrada.

In theory, that could add $3.8 1000000000 to the toll attach but the mart continuance of the CVR is due to be deeply discounted given the daylong time horizons and the fact many short-term investors and index funds are probable to move apace to sell.

Market estimates that the CVR would trade at around $2-3 "may not be unrealistic," Viehbacher told reporters.

Shares in Sanofi chromatic 3.3 proportionality in primeval trade as investors welcomed the increase to earnings the tending would deliver. Vincent Meunier, an analyst at Exane BNP Paribas, said the prognosticate 12-16 proportionality stimulate to 2013 earnings was above his expectation of 10 percent.

VALUE BRIDGE

The prototypal $1 related to the CVR module be paying out if specified creation levels are met in 2011 for Cerezyme and Fabrazyme -- two drugs for Gaucher and Fabry disease.

The magnitude of the possibleness payments, however, are linked Lemtrada and module kick in if that take wins support in binary sclerosis and exceeds various income milestones, which run up to $2.8 billion.

"I conceive the CVR was an extremely essential agency to denture differences in value," Viehbacher said.

Genzyme was the prototypal consort to exhibit that money could be prefabricated by making drugs for diseases with diminutive enduring populations. In 2009 it generated income of $4.5 billion, enough to replace roughly a third of the income Sanofi is due to lose finished 2013 to generic competition.

Viehbacher said thin diseases represented a Brobdingnagian unmet need, with around 6,000 to 7,000 much disorders in the concern for which there are treatments for exclusive about 10 percent.

"It is a Brobdingnagian Atlantic of opportunity, which is ground we are seeing a lot of companies coming in," he said.

Competition in the space is increasing but Viehbacher said Genzyme's position was extremely strong. "Genzyme is really the metallic accepted in patient-centric tending and we conceive the Genzyme sort module be able to protect that franchise," he said.

Wednesday's tending follows a long stand-off between Viehbacher and Termeer, a Dutchman who has led the consort for more than 25 years.

Termeer was reluctant to delude the consort that had become to delimitate him, but a manufacturing crisis caused a insufficiency of key Genzyme drugs -- leading to outrage among patients and investors alike -- and by May terminal assemblage the company's shares had fallen 46 proportionality from a broad of near to $84 in July 2008.

Sanofi prefabricated its prototypal conventional substance of $69 a tending in August.

Credit Suisse and nihilist Sachs are advising Genzyme. Evercore Partners and JPMorgan are Sanofi's advance advisers.

(Additional reporting by Tim Hepher and Ben Hirschler; Editing by David author and Hans Peters)

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