Corporate governance convergence through cross-border mergers: the case of Aventis 85
headquartered in Lyon. It would contain: Aventis Crop Science, Aventis Animal
Nutrition, and Merial.
According to pro-forma projections, the pharmaceuti-
cal sector would account for 73% of Aventis’ 1998 net sales, and the agricul-
tural sector accounted for the remaining 27%.
The overall corporate headquarters would be in Strasbourg, France, which
gave Aventis a French incorporation. It considered itself a European multina-
tional, however, and planned to “explore economically feasible possibilities for
its transformation into a European stock corporation with corporate domicile
in France once such form becomes available.”
As a French company, it
“would benefit from reduced income tax rates through the French regime of
worldwide tax consolidation (‘régime du benefice consolide’).”
German Hoechst shareholders would also benefit from a French tax credit—
avoir fiscal—which amounted to 50% of the net dividend.
Aventis would have a corporate governance structure composed of a 10-
member supervisory board and a 4-member management board.
The role of
the two boards is detailed in Section V. Table 4.6 presents the proposed board
members and executive committee at the time of the merger.
In 1999, Aventis had net sales of 18.4 million with earnings of .96 per
Its shareholders were located in Europe (approximately 40%), the
United States (22%), and in Kuwait (14%).
In the same year, Aventis spent
3 million on research and development, with 2.5 million going to the phar-
maceutical group (roughly 17% of net sales).
The company ended 1999 with
100,000 employees, who were located in Europe (54%), North America
(20%), and Asia (14%).
It was projected to have the sixth-largest worldwide
pharmaceutical sales force, with 18,000 sales representatives.
This was just
one indication of its significant size and scope in life sciences.
4.5 Corporate governance: Rhône-Poulenc, Hoechst, and
the French and German corporate codes
4.5.1 Sources of data and overview of results
In this section, we analyze the differences between the French corporate code
and the German corporate code. These dictate the corporate governance
SEC Form 14D-9, p. 74.
Merger Report, p. 53.
Merger Report, p. 58.
Merger Report, p. 58.
SEC Form 14D-9, p. 94.
Aventis Annual Report 1999, p. 1.
Ibid., p. 40.
Ibid., p. 23.
Ibid., p. 35.
SEC Form 14D-9, p. 50.
“Modern German Corporation Law Volumes I & II,” by Enno W. Ercklentz Jr., 1979 Oceana
Publications, Inc., Dobbs Ferry, NY. “French Company Law” by J. Le Gall, general editor Robert
R. Pennington, LL.D., Oyez Publishing, London.
Table 4.6 Proposed Aventis Board, 1999
Supervisory board members
Name Former position Former company
Dr. Martin Fruhauf Chairman, supervisory board; Hoechst
member, management board
Dr. Hubert Markl Member, supervisory board Hoechst
Dr. Gunter Metz Member, supervisory board; Hoechst
former deputy chairman of
management board
Seham A. Razzouqi Member, board of directors of Hoechst
Kuwait Petroleum Corp.;
Managing Director of Finance,
Administration, and External
Relations of Kuwait Petroleum
Dr. Hans-Jurgen Schinzier Member, supervisory board Hoechst
Marc Vienot Member, board of directors Rhône-Poulenc
Jean-Marc Bruel Member, board of directors Rhône-Poulenc
Serge Kampf Member, board of directors Rhône-Poulenc
Didier Pineau-Valencienne Member, board of directors Rhône-Poulenc
Michel Renault Member, board of directors Rhône-Poulenc
Management board members
Name Former position Former company
Jurgen Dormann (Chairman) Chairman, board of management Hoechst
Horst Waesche Member, management board Hoechst
Jean-Rene Fortou (Vice
Chairman) Chairman and CEO Rhône-Poulenc
Igor Landau Group president; member, Rhône-Poulenc
board of directors
Executive committee members
Name Former position/company Position within Aventis
Richard Markham Hoechst Marion Roussel, CEO of Aventis
Chairman of Management Pharma
Jurgen Dormann Hoechst, Chairman of Chairman of
(Chairman) Board of Management Management
Alain Godard Rhône-Poulenc Plant and CEO of Aventis
Animal Health, President Agriculture
Klas Schmieder Hoechst, CFO Chief Admini-
strative Officer
Rene Penisson Rhône-Poulenc, Director of Chief Human
Human Resources Resources
Patrick Langlois Rhône-Poulenc, CFO CFO
(Source: Form 14D-9, p. 95–99)

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