Sanofi-Aventis has made a $2 billion bid for Czech generic drugmaker Zentiva. The offer will compete with an earlier bid by finance group PPF--Sanofi is offering 10 percent more than the group, however. The company seems to have made the offer for many of the same reasons Daiichi Sanyko bid for Ranbaxy. According to the WSJ Health Blog, "it's understandable why the company might want Zentiva. With its classic Big Pharma combo of strong cash flow and looming patent expirations, Sanofi needs to make some deals." Additionally, a Zentiva buyout would give Sanofi a foothold in Eastern Europe, an emerging market that many large drug companies are targeting. The acquisition is not entirely out of the blue; two years ago, Sanofi spent $518 million to acquire a 25 percent stake in the Czech generics drug business.
"The intended acquisition of the control of Zentiva carries a strong strategic rationale," Sanofi said in a statement. Generic buyouts will probably represent a "strong stragegic rationale" for a number of other Big Pharmas in the coming months. It will be interesting to see which generics maker is next on the buyout list.
- check out Sanofi's statement
- read the WSJ report