Strasbourg, France-based Aventis has announced its intention to sell off part of its remaining stake in Rhodia, its loss-making former specialty chemicals subsidiary. The move reduces its stake in Rhodia to 15.3 per cent from 25.2 per cent, with the 9.9 per cent holding transferring to purchaser Crédit Lyonnais by the end of this month.
Patrick Langlois, vice chairman and chief financial officer at Aventis, said: "This transaction is an important step in our continued focus on our core pharmaceutical activities and reaffirms our commitment to our shareholders to exit the non-core industrial activities." He added that the transaction is a first step towards compliance with the requirement to reduce the firm's stake in Rhodia to below 5 per cent by April 2004, as agreed with EU and US antitrust authorities when Aventis was formed from the merger of Germany's Hoechst and France's Rhone-Poulenc in 1999.
"Of course, we will continue to seek ways to divest significant portions of our remaining shareholding in Rhodia," concluded Langlois.
Aventis move comes at a difficult time for Rhodia, which is in the throes of a boardroom conflict with chief executive Jean-Pierre Tirouflet facing a shareholder revolt and a bid to oust him from his position at the firm's annual meeting on April 29.
The rebel shareholders, who include among their ranks Belgian investor Hughes de Lasteyrie du Saillant, have lost patience with Tirouflet after a difficult three years for the company, albeit at a time when the wider chemicals industry has also been in the doldrums. Their grievances include a plummeting share price and allegations that Tirouflet is not doing enough to reduce debt at the group.
In February, Rhodia restructured its pharmaceuticals business - which covers the development of processes, small batch manufacturing for preclinical and clinical trials, the development of advanced intermediates as well as the production of active ingredients both for prescription and generic drugs - under the direction of new president Nick Green.