Hoechst And Rhone-Poulenc Announce Life Sciences Merger

Hoechst AG and Rhone-Poulenc SA have agreed to merge their life sciences activities into a new company, called Aventis. The new venture will be jointly owned by Hoechst and Rhone-Poulenc and will comprise the pharmaceutical and agricultural businesses of both groups. It will be incorporated in France, with global headquarters in Strasbourg. The agreement, signed on Dec. 1, 1998, launches the procedure for the first phase of a two-step plan which will eventually lead to a full merger of Hoechst and Rhone-Poulenc after the divestment of their remaining non-life sciences assets.

"We want to create a new company, with European roots and global reach, to take full advantage of the extensive opportunities of life sciences in the 21st century," said Jean-Rene Fourtou, chairman of Rhone-Poulenc SA, and Jurgen Dormann, chairman of Hoechst AG, in a joint statement. "With its new culture, increased R&D resources, competitive position in emerging technologies, enhanced pipeline and strong marketing muscle, Aventis will have a solid platform for sustained medium and long-term growth in both sales and profitability."

With 1997 pro forma sales of US$20 billion, 95,000 employees and a combined R&D budget of $3 billion, Aventis will become a global leader in the life sciences. Combining the life sciences assets of both companies can be expected to provide additional operational efficiency with synergies of more than $1.2 billion over the next three years, the companies predict. Around 60% of the estimated savings would be in pharmaceuticals and around 40% in agriculture and other areas.

It is anticipated that Dormann will be appointed chairman of the Aventis Board of Management and Jean-Rene Fourtou vice chairman. The Board of Management will also include Igor Landau and Horst Waesche. The Executive Committee of Aventis will comprise the four Board of Management members and the following senior executives: Alain Godard (CEO of Aventis Agriculture), Richard J. Markham (CEO of Aventis Pharma), Patrick Langlois (CFO), Rene Penisson (Human Resources) and Klaus Schmieder (chief administrative officer).

The closing of the transaction is anticipated for mid 1999, after completion of all legally required procedures and approvals.

For more information: Patricia Munzer, Hoechst AG, 3 Park Avenue, New York, NY 10016, USA. Telephone: 212-251-8088. Fax: 212-251-8011.