French drug manufacturer Sanofi-Aventis is expected to increase its offer for Genzyme, the world’s third-largest biotechnology company.

Sanofi’s initial bid, which valued the company at around $18.5bn, was rejected by Genzyme’s board, which said it “dramatically undervalued” the company.

Genzyme’s stock previously plunged after the US Food and Drug Administration identified problems with microbiological monitoring at a manufacturing facility, which resulted in the company losing control over one of its largest production facilities in Massachusetts, US.

Sanofi has also questioned the company’s performance under chief-executive Henri Termeer, particularly manufacturing problems that have hindered products reaching markets.

Sources close to the France-based pharmaceutical giant suggest that the company would raise its bid providing that Genzyme is prepared to negotiate.