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Hoechst, Rhone-Poulenc Merger Creates $3 Billion Budget for R&D Efforts

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PARIS--The announced merger of the life sciences activities of Hoechst and Rhone-Poulenc would yield a combined $3 billion research and development budget--the industry's largest--to the new company, which will be named Aventis. It will be incorporated in France with headquarters in Strasbourg. Hoechst and Rhone Poulenc will each own 50 percent of Aventis but will continue to be listed separately, under the new names Aventis Hoechst and Aventis Rhone-Poulenc.

The companies' chairmen claimed that Aventis's positioning in the life sciences will allow it to take full advantage of the technological and business synergies between pharmaceuticals and agriculture. Jurgen Dormann, Hoechst's chairman, said, "We believe that the fields of human health, crop science, and animal health operate today in a common, innovation-driven environment. Aventis will have an impressive range of emerging technologies and expertise that will benefit all its businesses."

They claimed that Aventis will possess a wide range of emerging technologies, particularly in functional genomics, combinatorial chemistry, high-throughput screening, immunology, and gene therapy. The assets will be complemented by access to a network of academic and biotech alliances in the US, France, and Germany, the companies added.

Analysts have accused both firms of lagging in implementing the cutting-edge research technologies, but the merger is expected to facilitate major laboratory upgrades, among other things to take advantage of the latest genomics equipment.

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