NEWS OF THE WEEK BUSINESS
NOVARTIS SNAPS UP STAKE IN ROCHE
Roche
Strategic investment now of $2.8 billion may pay off big in the future
W
ITH ONE ELEGANT MOVE,
Swiss pharmaceuticals company Novartis has begun what will almost certainly lead, eventually, to a full takeover of its crosstown rival Roche Holding AG, parent of Hoff mann-La Roche. Novartis has bought 2 0 % of Roche's voting shares from Swiss gadfly investor Martin Ebner for approximately S2.8 billion. The purchase makes Novartis the sec ond-largest holder of Roche shares, after the 50.1% block held by the Hoffmann and Oeri-Hoffmann families. Ebner, who had
VASELLA
been trying to win a seat on the Roche board in a bid to restruc ture the company, finally lost patience and sold out. Securities analysts say Novar tis Chairman and Chief Execu tive Officer Daniel Vasella is determined not to enter a hos tile-bid situation for Roche. Instead, Vasella says, he is open to discussions with Roche exec utives and the family and would like to pursue collaborative proj ects. The buy is, he says, "a longterm financial investment, which is also strategic in nature. We believe that we were the most log-
ENVIRONMENT
FORD SETS C02 REDUCTIONS Company announces its greenhouse gas emissions, outlines plan to cut them
O
N MAY 3, FORD MOTOR CO.
became the first large automaker to report how much C 0 2 its vehicles and man ufacturing facilities contribute to
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global greenhouse gas emissions. Each year, Ford says, it releases 400 million metric tons of C 0 2 equivalent to the atmosphere. Its plants emit only 12 million met ric tons, and its vehicles emit 388 million metric tons. Global emis sions from all sources total 22,561 million metric tons. Ford has been criticized by environmental groups for con tinuing to promote gas-guzzling sport-utility vehicles (SUVs), while at the same time profess ing concern about global climate change. But over the past year, Ford has taken steps to reduce C 0 2 emis
ical buyer of the Roche share package offered by Ebner." Vasella's strategy seems to be a gentle hemming in of Roche and its options. Roche now will find it difficult to make any major acqui sition or merger deals without the support of Novartis, which, effec tively, could block any such move. Novartis, itself the product of the 1996 merger of Sandoz and Ciba-Geigy, has been performing well as an investment holding and is thought to have a much stronger pipeline than Roche. Together, the two companies would have combined pharma ceutical sales of approximately $20 billion per year. Novartis' pharmaceuticals sales in 2 0 0 0 were $11.58 billion, and those of Roche were $10.47 billion. The two combined would join the superleague of pharmaceuticals giants now occupied by Pfizer and GlaxoSmithKline, with sales of $20 billion or more per year. -PATRICIA SHORT
sions, the report points out. It plans to have a hybrid-electric SUV for sale in 2 0 0 3 and to improve the fuel economy of its SUV fleet 2 5 % by 2 0 0 5 . In Europe, it has voluntarily agreed to reduce C 0 2 emissions from its new vehicle fleet 25% from 1995 levels by 2008. Ford also plans to have a test fleet of fuel-cell vehi cles on the road by the end of next year. "Fuel cells could be the pre dominant power source in 25 years," replacing the internal combustion engine, said com pany Chairman Bill Ford at a con ference run by Greenpeace in early May "There is now more than enough evidence to warrant an immediate and considered re sponse" to concerns about cli mate change, Ford said. But he stressed that, in contrast to gov ernment action, "market- and competition-driven change is the best hope for moving quickly and effectively to address the is sue."—BETTE HILEMAN HTTP://PUBS.AC5.ORG/CEN
