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Actavis Makes $1.6 Billion Takevoer Bid for Pliva
In yet another deal signalling consolidation in the generic drug industry, Actavis Group (Reykjavik, Iceland, www.actavis.com) has made a $1.6-billion takeover bid for the Croatian generic drug maker Pliva dd (Zagreb, Croatia, www.pliva.com). If successful, the deal would make Actavis the third largest global generic drug company and help position the company’s R&D and manufacturingin Croatia.
"The two companies operate in a rapidly consolidating industry where geographic reach, product pipeline depth, and cost-effective manufacturing are the keys to success in a global marketplace," said Robert Wessman, Actavis's president and CEO in a company statement. "We believe that the combination of Actavis and Pliva has a highly compelling strategic rationale, creating the world's third largest generic pharmaceuticals company with a leading presence in the key European, Russian, and US markets, an exceptionally strong product pipeline, and access to low-cost manufacturing capabilities."
Actavis's bid for Pliva follows two other acquisitions by Actavis in 2005 to build its generics business—the $500 million acquisition of Amide Pharmaceuticals Inc. and the $810 million purchase of the human generics business of Alpharma Inc.
Pliva has thus far rejected the offer. "Management does not believe that the proposal adequately reflects the fundamental value and future prospects of the company," said the company in a prepared statement. "Pliva is currently completing its transition phase having recently divested its loss-making proprietary businesses and has made significant progress in its manufacturing consolidation program through the divestment of its production plant in Germany. Through these actions, Pliva has materially improved its profitability prospects, which it expects to become visible in 2006 and beyond."