By Gareth Macdonald
23-Sep-2008 - Sanofi-Aventis' EUROs1.8bn ($2.6bn) offer for Czech generics firm Zentiva has been unanimously accepted by the latter firm's board after four months of wrangling that has seen the bid increase by 9.5 per cent.
The proposed acquisition, which is part of Sanofi's effort to establish a strong sales and manufacturing platform in central and eastern Europe, saw the firm beat off a rival bid from Czech financial group PPF, which holds a 19 per cent stake in Zentiva.
Jean-Marc Podvin, Sanofi's vice president and head of media relations, told in-PharmaTechnologist.com that “approval from Zentiva's board significantly improves the chance of the deal's success”.
Podvin explained that Zentiva, which has leading positions in the drug markets in the Czech Republic, the Ukraine, Turkey and numerous other states in the region, would be a "very good strategic fit for Sanofi."
He added that, while it is too soon to talk about manufacturing integration, “[Sanofi] believe that acquiring Zentiva will accelerate its position in the region” and will play a key part in the firm's global “volume and value” development strategy.
In a press statement, Zentiva CEO Jiri Michal, who will remain in his position as part of Sanofi's revised bid, said that the firm “believes that the improved offer represents attractive value for Zentiva's shareholders, particularly in light of the current market turbulence.
“We are also convinced that the proposed transaction safeguards the interests of all of our other stakeholders, our customers, suppliers and employees and will ensure that Zentiva has a strong future with access to the resources of the wider Sanofi-Aventis Group," added Michal.
Emerging CEE pharmaceutical market
The purchase, which is expected to complete on November 28, would secure Sanofi's presence in the strong Czech pharmaceutical market which is dominated by the generic products covered by the country's public health care system.
In January, the Czech government introduced a new system of prescription fees that may dampen the market somewhat. Despite this, a May survey by industry analysts Espicom predicted that sales in the country will expand at a rate of 8.5 per cent a year and reach a total value of $5.5bn (EUROs3.7bn) by 2013.
On the latter point Podvin explained that, while the Czech government's introduction of fees had obviously been taken into consideration, “the dynamic of the global drug industry is reshaping” and that no one local decision would be the determining factor in Sanofi's acquisition programme.
He concluded by commenting that: “Sanofi is eager to further extend its development in the CEE region.”
