Aventis SA (A): Planning for a Merger

By: Carin-Isabel Knoop and Joshua D. Margolis

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Synopsis: Eight executives at Hoechst and Rhone-Poulenc must make four crucial decisions on the eve of merging their companies to become Aventis--what would become the world's third largest pharmaceutical firm. In addition to formulating a vision and strategy, the two firms must plot their intensified efforts in the U.S. market, pick a leader, and choose between two approaches to research and development. The merger represents the ongoing efforts of the two predecessor companies to remake themselves into life science companies. They face a range of pressures, from falling prices and intensifying demands on R&D for blockbuster pharmaceuticals to union opposition to the merger, skepticism from research analysts, and regulatory scrutiny. Amid these pressures, they must combine national and corporate cultures, merge into a single entity, and deliver the promised synergies. Concludes with a surprising development, when one of Hoechst's major shareholders objects to the merger.