PARIS AP Two of Europe's largest drug makers Hoechst of Germany and Rhone-Poulenc of France announced Tuesday they are merging their pharmaceutical and agrochemical operations. The new company will be called Aventis and will be based in Strasbourg eastern France. The move was a step toward a full merger between the French and German companies which should be completed within three years said Rhone-Poulenc chairman Jean-Rene Fourtou. Analysts have warned against a full merger until the heavily indebted firms reduce costs. ``Unlike what has happened to other companies in our industry the creation of Aventis provided we obtain all the necessary authorizations will be translated into reality'' Fourtou said ahead of a news conference in Strasbourg. A statement released by the two companies said it was ``anticipated'' that Hoechst Chairman Jurgen Dormann would be the new chairman of Aventis and Fourtu the vice chairman. With annual sales of around dlrs 20 billion the new company will be tied for the No. 1 ranking with Switzerland's Novartis in the life-sciences sector. The two companies said they expected annual cost savings of dlrs 1.2 billion in three years with 60 percent of those generated in their pharmaceutical operations and 40 percent in agrochemicals. Unions in France and Germany have been critical of the merger fearing layoffs. Hoechst employs 118000 workers and Rhone-Poulenc 68000. Rhone Poulenc shares were 4.2 percent lower to 271.8 francs dlrs 47.70 per share in afternoon trading as investors expressed displeasure that a full merger hadn't been announced. sp-jn-dj APW19981201.0749.txt.body.html APW19981201.0127.txt.body.html