Germany's Stada amenable to merger of equals

Germany's Stada has been casting about for ways to grow, and it's met with mixed success: Some of its moves into Eastern Europe and Russia have paid off, while the recent purchase of Serbia's Hemofarm touched off a writedown, thanks to bills unpaid by laggard wholesalers. Recently, it's said to have been eyeing some of the consumer brands GlaxoSmithKline is trying to sell off.

But now it sounds as if Stada's flirting with a merger. CEO Hartmut Retzlaff told Bloomberg that he'd be interested in a deal with a similar-sized branded drugmaker or biotech. Stada "would not rule out any possible constellation as long as it made business sense," Retzlaff told the news service. "One could imagine different constellations."

Retzlaff said he'd prefer to combine with a branded drugmaker rather than another generics company. As Bloomberg points out, a merger with another mid-sized company could stave off a takeover by Big Pharma or Big Generics. In fact, after Teva Pharmaceutical Industries snatched fellow German generics specialist Ratiopharm out from under Pfizer last year, Stada was bandied about as a possible second-choice acquisition for the U.S.-based drugmaker.

Retzlaff may need to work quickly. Last month's writedown on Hemofarm sent Stada's stock into a tailspin. The 30%-plus price drop has made the company into a bargain, JPMorgan Chase analyst David Adlington said in a note to investors (as quoted by Bloomberg). Then again, bidders might not materialize, given the company's lack of "attractive assets" Nomura's Martin Brunninger said.

- read the story from Bloomberg