Is Pfizer better off without Ratiopharm?

Losing Ratiopharm to Teva Pharmaceutical Industries may have made Pfizer a winner. That's the theory advanced by Motley Fool, which says that to outbid Teva, Pfizer would have had to overpay. And overpaying, as anyone knows, is losing.

Here's the rationale: Teva could pay about $5 billion for the German generics maker because of the similarities between their businesses. Because both companies are chiefly generics makers, there would be overlapping operations to cut; therefore, paying more up front would be offset by cost-cutting later on. Pfizer doesn't have a big generics operation, so those synergies just wouldn't happen.

Analysts agreed, saying that Pfizer's bidding restraint was admirable. "To me it speaks a little bit to more sound capital allocation judgments that Pfizer might be making," Morningstar's Damien Conover tells Reuters. "For Pfizer to go ahead and let it go is a bit different than what we've seen in the past."

That's not to say that Pfizer isn't still in the market for a generics deal. Plenty of people have predicted that it might go after Stada, another German generics maker. Motley Fool points out that Stada has a presence in developing countries, so it would kill two diversification birds with one stone. But another generics firm might do just as well. "We continue to see a move into generics as making sense for Pfizer and would not be surprised if the company pursued additional generic assets," JP Morgan analyst Chris Schott writes to investors.

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