Novartis prepared to talk with Aventis

Swiss pharmaceutical company Novartis said it is to start merger talks with Franco-German Aventis, to help it stave off a hostile bid from Sanofi-Sythelabo.

Aventis rejects Sanofi's bid as too low and potentially opens up its shareholders to the risk of a generic challenge to Sanofi's blockbuster drug Plavix.

Novartis said earlier today that it has accepted Aventis' invitation to begin merger talks, though the firm was cautious on whether a deal would actually go ahead or not.

A merger would create the world's second largest drugmaker behind Pfizer.

Aventis invited Novartis into talks earlier this month, the first condition for talks, but the Swiss firm has said it would start negotiations only if the French government was neutral.

The French government's stance so far has been that it prefers an all-French solution in the shape of the €45bn hostile bid from Sanofi-Synthelabo SA.

Aventis was formed from the merger of Germany's Hoechst AG with France's Rhone-Poulenc SA in 1999. It employs around 9,000 people in the German state of Hesse alone.