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European Generics

Sanofi-Aventis and Ranbaxy are the latest to bid for Central European pharma firms

by Michael McCoy and Jean-François Tremblay
April 3, 2006 | A version of this story appeared in Volume 84, Issue 14

Sanofi-Aventis and Ranbaxy Laboratories are the latest pharmaceutical companies to make acquisitions in the fast-growing Central European generic drugs business.

Paris-based Sanofi has spent about $516 million to acquire a 24.9% interest in the Czech generics company Zentiva. Sanofi bought most of the stake from Warburg Pincus, which invested in one of Zentiva's predecessor firms in 1998, and the rest from current and former Zentiva employees.

Sanofi, which is now Zentiva's largest shareholder, calls the purchase "a strategic move in the development of Sanofi-Aventis in Central and Eastern Europe." Zentiva was formed in August 2003 by the merger of Léčiva and Slovakofarma, the largest drug companies in the Czech Republic and Slovakia, respectively. Zentiva had sales last year of close to $500 million, up 11% over 2004.

Meanwhile, India's Ranbaxy will pay Advent International $324 million for a 97% stake in Terapia, Romania's largest manufacturer and distributor of generic pharmaceuticals. With annual sales of about $80 million, Terapia markets almost 160 products and operates two finished-dosage manufacturing sites in Romania.

Advent, a Boston-based private equity firm, bought a 91% stake in Terapia in August 2003 for $44 million. Ranbaxy says Terapia has the know-how to prepare generics marketing requests to European Union standards. This capability will promote Ranbaxy's business throughout Europe and the former Soviet Union, the firm adds.

The two deals follow an unsolicited $1.6 billion bid by Iceland's Actavis for the Croatian generics maker Pliva (C&EN, March 27, page 9). Pliva had sales last year of $1.2 billion.


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