According to the French article, a deal could possibly close by September.
Both Sanofi-Aventis and Bristol-Myers declined to comment.
Sanofi-Aventis has been considered a favorite for acquiring Bristol-Myers since September 2006, when Bristol-Myers former Chief Executive Peter Dolan was let go, and interim CEO James M. Cornelius took charge. Cornelius' last claim to fame was shepherding the sale of medical device Guidant to Boston Scientific. Cornelius has repeatedly denied he is interested in a permanent CEO position.
Also, in September, Bristol-Myers Chairman James D. Robinson hinted at the possibility of a sale, saying the company would "deal with any bonafide proposals."
Merger in 2004
In 2004, the drugmakers Sanofi-Synthelabo and Aventis merged to create the world's third-largest pharmaceutical firm.
Buying Bristol-Myers would be a coup for Sanofi's ambitious chairman and veteran dealmaker, Jean-Francois Dehecq, who is due to retire from the French firm at the end of 2009.
The acquisition of the U.S. company -- which has a market value of around
$51.5 billion -- would see Sanofi leapfrog Pfizer as the biggest
pharmaceuticals company in the world by sales and push GlaxoSmithKline back into third place.
Many analysts and industry executives are convinced Sanofi has been taking a long, hard look at U.S.-based Bristol-Myers in recent months.
"This wouldn't surprise me. Sanofi needs increased exposure to the U.S. market. They have substantially deleveraged their balance sheet since they took over Aventis, so they are prone to do something going forward," WestLB analyst Oliver Kaemmerer said.
Any bid could be a mixture of cash and shares, he said. Novartis Chairman and Chief Executive Daniel Vasella said only last month he believed such a deal could be on the cards.
"I would not be surprised if companies, which are connected via products--like Sanofi-Aventis and Bristol-Myers Squibb--think about a merger," Vasella told a Swiss newspaper.
Sanofi, with a market capitalisation of 95 billion euros ($123 billion), is twice the size of Bristol-Myers, but its shares are less highly rated, and analysts believe an acquisition could significantly dilute Sanofi earnings.
Bristol-Myers, whose shares have been buoyed in recent months in part by takeover speculation, trades on around 21 times forecast 2007 earnings while Sanofi fetches just 13.3 times, according to Reuters data.
Analysts believe any final deal for Sanofi to buy its smaller U.S. partner is likely to be contingent on the outcome of litigation surrounding blockbuster Plavix.
A key court case over Plavix patents opened in the United States last week, with the two allies fighting a challenge from Canadian generic drugmaker Apotex. A verdict is not expected before the third quarter of the year.
Most analysts bet Sanofi and Bristol-Myers will win the case, which could then clear the way for a full-blown merger.
Bristol-Myers has been seen as vulnerable to a takeover for some time, following management upheaval, while Sanofi would benefit from adding the U.S. company's many new experimental drugs to its pipeline.
"Bristol-Myers becomes a very attractive takeover prospect because it has very solid pipeline, once the Plavix issue is resolved," a second analyst commented.