French drug maker Sanofi-Aventis (NYSE: SNY) agreed to acquire U.S. biotechnology company Genzyme (Nasdaq: GENZ) for $74.00 per share in cash or about $20.1 billion, plus extra payments linked to experimental multiple sclerosis drug Lemtrada.

The purchase of Genzyme would give Sanofi access to the growing market of rare diseases and also compensate for revenue losses as patents expire on some of its biggest-selling products.

The offer price represents a discount of 0.4 percent to Genzyme closing price of $74.30 on Tuesday.

This transaction will create a meaningful new growth platform for sanofi-aventis while expanding our footprint in biotechnology, said Sanofi chief executive Christopher Viehbacher.

Viehbacher said he expects the transaction to be accretive from year one, and the Contingent Value Right (CVR) structure rewards both Genzyme and sanofi-aventis shareholders, particularly if Lemtrada outperforms the market's current expectations.

Sanofi's agreement puts an end to nearly a nine-month battle between the companies after Genzyme had last year rejected Sanofi's $69 per share or $18.5 billion offer on grounds of undervaluation. Sanofi took the bid directly to shareholders in October and extended the offer until February 15.

Sanofi also announced on Wednesday that it has extended the current tender offer until March 16.

Sanofi expects the deal to add to its business net earnings per share in the first year following closing, and accretive in the range of euro 0.75 – euro 1.00 by 2013.

The two companies were engaged in discussions regarding a potential CVR for Lemtrada (alemtuzumab MS) with milestone payments based upon approval and certain sales thresholds. Although those talks have continued and have included commercial teams and executives of both the companies, significant differences remained on the potential CVR and the value of Sanofi's offer.

Viehbacher said the CVR structure served as an important value bridge between the two companies.

The CVR terminates on December 31, 2020 and entitles Genzyme’s stockholders to payments worth up to $14 in total, depending mainly on the performance of Lemtrada.

The transaction has already received anti-trust clearance from the European Commission and the United States Federal Trade Commission.

The acquisition would be the biggest industry takeover since Merck bought rival Schering-Plough for about $47 billion in November 2009, according to Bloomberg data.

The transaction is expected to close early in the second quarter of 2011.

ADR's of SNY ended Tuesday's regular trading at $34.49, up 1.92 percent.