Novartis to Start Merger Talks With Aventis

Swiss drug maker Novartis will start merger talks with French drug firm Aventis to help it fight off a $54.9-billion hostile bid from Sanofi-Synthelabo, another French drug maker.

By acquiring Aventis, Novartis would create the world’s No. 2 drug maker behind Pfizer Inc. It also would leave Sanofi out in the cold and potentially vulnerable to takeover bids itself.

Novartis said it was not sure it could cement a deal, but its decision to begin formal negotiations still surprised investors, many of whom had expected it to walk away after strong signals from French officials in support of Sanofi’s stock-and-cash bid.