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FRANKFURT: Israeli copycat drugs giant Teva took a major stride into Europe on Thursday with the five-billion-dollar purchase of Ratiopharm, formerly owned by a German billionaire who killed himself.
The 3.6-billion-euro (4.9-billion-dollar) acquisition will "position Teva as the leading generic pharmaceutical company in Europe," it said, boosting annual sales there to 5.2 billion dollars from 3.3 billion dollars at present.
Teva is already the world number one in generic medicines - drugs whose patent has expired - but less than a quarter of its 14 billion dollars in annual sales comes from Europe.
Germany is the world's second largest market in this area, worth around 8.8 billion dollars, Teva said. Ratiopharm is Germany's second largest generics producer and number six worldwide.
"This is an important acquisition for Teva. This transaction is perfectly aligned with our long-term strategy in which Europe is an important pillar and growth driver," Teva chief executive Shlomo Yanai said.
"Ratiopharm will provide us with the ideal platform to strengthen our leadership position in key European markets, most notably in Germany, as well as rapidly growing generic markets such as Spain, Italy and France."
It is the biggest takeover in the generics industry since Teva itself bought US-based Barr Pharmaceuticals for 7.5 billion dollars in 2008.
"We are interested in further acquisitions," Yanai told a telephone conference on Thursday.
Ratiopharm belonged to German tycoon Adolf Merckle, who threw himself under a train in January 2009 as the global financial crisis and disastrous stock market bets pushed his business empire onto the rocks.
The 74-year-old's VEM holding company controlled Ratiopharm, building materials giant HeidelbergCement and one of Europe's biggest wholesale drug distributors, Phoenix, amongst others.
"The separation of Ratiopharm is a painful step for us," Merckle's son Ludwig Merckle said, while calling the sale a "good solution."
Teva reportedly saw off competition from US giant Pfizer and from Iceland's Actavis to acquire Ratiopharm. Pfizer baulked at the high asking price and may now turn its attention to Germany's Stada Arzneimittel, reports said.
Press reports had put the price that Merckle's heirs wanted at between two and three billion euros but Yanai said that paying more was "fair."
The combined entity will hold the leading market position in 10 European markets, including Britain, Italy, Spain and the Netherlands as well as a top three ranking in 17 countries including Germany, Poland and France, it said.
In addition, the transaction will nearly double Teva's sales in Canada.
Teva expects synergies of at least 400 million dollars within three years and the deal will begin to boost Teva's profits within nine months of the transaction being completed, it said. - AFP/de
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