Actavis Makes $1.6 Billion Bid to Buy Croatia's Pliva
March 17 (Bloomberg) -- Actavis Group Fh, an Icelandic generic-drug company, said it offered to buy Croatian rival Pliva d.d. for about $1.6 billion to form the world's third- largest maker of copycat treatments.
The 570 kuna-a-share offer is about 35 percent more than the average Pliva stock price in the last three months, Reykjavik- based Actavis said today in a statement on its Web site.
Drugmakers are buying rivals as demand for copycat medicines rise. Israel's Teva Pharmaceuticals Industries Ltd. acquired Miami-based generic maker Ivax Corp. in January for $7.6 billion, while Switzerland's Novartis AG grabbed a leading position in the generics market when it purchased Hexal AG and Eon Labs Inc. in 2005.
``Geographically, it makes a lot of sense for Actavis and Pliva to hook up,'' said Frances Cloud, an analyst at Nomura Code Securities in London. ``By and large, Pliva is fairly strong where Actavis is fairly weak.''
Pliva's global depositary receipts soared 12 percent, or $1.99, to a six-year high of $18.50 at 1:22 p.m. in London. Actavis rose 1.3 kronur, or 2.2 percent, to 60.5 kronur.
Marija Mandic, a spokeswoman for Zagreb-based Pliva, said she hadn't heard about Actavis' statement and didn't offer any immediate comment. Actavis spokesman Halldor Kristmannsson didn't immediately return calls for comment.
``Croatia would become the hub for Central and Eastern Europe and a key centre for future R&D and manufacturing, providing significant support for all of our other international markets,'' Chief Executive Officer Robert Wessman said in the statement. ``There would also be an important role for the Pliva brand, which has a fantastic heritage in established markets.''
Generic drugs work the same way as branded medicines. Because their makers spend less on research and marketing, the copycats often sell for less than half the price of brand-name equivalents.
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Alex Kuli in Budapest at firstname.lastname@example.org.
Last Updated: March 17, 2006 08:39 EST