Generic auction

3 March 2010 By Alexander Smith

The U.S. pharma giant seems to have been lured into the battle for the German generics producer. Creditors will be happy, as both of the current bidders have reasons not to be too aggressive. But Pfizer may also be cautious. It apparently already quit the contest once.

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U.S. drugs giant Pfizer is set to reenter the bidding for German generic drug maker and make an offer worth nearly $4 billion this week, Reuters reported on March 3. Global generics leader Teva Pharmaceuticals Industries and Iceland's Actavis, backed by its main creditor Deutsche Bank, have also expressed interest.

According to one source quoted by Reuters, Pfizer had cooled on Ratiopharm, but had been asked to rejoin the auction, which could go on for several more weeks. Actavis was reported in February to have made the highest bid nearly 3 billion euros for Ratiopharm, a price which would make Ratiopharm the biggest generics acquisition since Teva's $7.5 billion takeover of U.S. rival Barr in 2008.

Ratiopharm was put on the block by Ludwig Merckle as part of concessions made to creditors by his father Adolf Merckle who committed suicide in January 2009 after ceding control of his business empire to lenders during the financial crisis.

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