This company is a complex of individual companies that have been merged together.
First of all, Aventis was formed in 1999 by the merger of Rhône-Poulenc and the German company Hoechst AG. The merged company was based in Strasbourg, France. (1). In 2004 this new company merged with Sanofi that itself had completed a merger with Synthelabo. Since 2004 the company name is Sanofi-Aventis.
Back in 1999, Sanofi was the second largest pharmaceutical in France and number seven in Europe according to the 1999 annual report. Now the combined company is the number one in both France and Europe.
The merger of pharmaceuticals is quite common in the sector. In 1998 Astra merged with the UK pharmaceutical Zeneca. It came as a response to new competition and a change in the healthcare sector where margins are cut. "2006 was an especially difficult year for Sanofi-Aventis, marked by the internal and external challenges inherent in this complex environment. The introduction of generic competitors to four of our major products in the U.S... (Annual report 2006).
Also during 2006, the company has changed its government structure. "The long-prepared separation of the office of Chairman of the Board of Directors and Chief Executive Officer will assure continuity in the strategy, dynamism and culture of sanofi-aventis." (annual report 2006).
Jean-Francois Deherq remained Chairman and Gerard le Fur is the new CEO as of 2007.
In this way the company is following the global corporate governance "best-practice."
The company has a strong and increasing presence in the BRIC- countries (Brasil, Russia, India and China), but about 70% of the sales is achieved in Europe and the US.
The business is divided into two main areas. One is the domain of Vaccines (about 10%) and the other pharmaceuticals, with brands like Lovenox and Plavix. This last brand came from Sanofi. These pharmaceuticals are categorized according to the therapeutic areas, like thrombosis (for which Lovenox is a medicine), cardiovascular, metabolic disorders, oncology, central nervous system, internal medicine.
The same annual report describes the distribution of the employee-functions, which are categorized into four main groups support (13,671 employees), Research & development (18,981), sales (35,902 - the so-called: medical visitors) and manufacturing (31,735). The total amount of employees ad up to an amazing figure of 100,000.
The main shareholders are the French L'Oreal and Total for both about 23%. 75% is publicly listed.
Integrating the various companies is not something that is done over a fortnight. One question in the Annual report is just about this integration of production: Doesn't integrating production result in a loss of flexibility? "It did not prevent us from being highly reactive in 2006. The decision not to contract out our manufacturing processes also gives us total control over the quality and traceability of our products. In an unstable context, with a strong pressure on costs, its enables us to guarantee the quality of the medicines we market, since they are produced in our own factories."
Outsourcing wouldn't be possible if not previously the different legacy operation are streamlined, otherwise the profit of outsourcing would all end up at the insourcer.
That the competition is still fierce shows the following and recent news-item: "PARIS -(Dow Jones)- Shares in French drug maker Sanofi-Aventis dropped Wednesday amid fears that its Plavix drug could face competition from a generic drug developed by Swiss company Schweizerhall Holding AG (2).
Another unique characteristic of this company is the mix of a French and German culture. This is visible in the organizational chart through the names of the various managers.
Hans Bool
(1) - http://en.wikipedia.org/wiki/Aventis
(2) - [http://money.cnn.com/news/newsfeeds/articles/djf500/200805090556DOWJONESDJONLINE000455_FORTUNE5.htm]
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