Sanofi-Aventis SA, France's largest drugmaker, is bidding $1.96 billion for the shares it doesn't already own in Czech pharmaceutical firm Zentiva.
The offer tops another bid by PPF Group and offers Sanofi-Aventis the opportunity to expand in a market growing faster than the US and Western Europe.
Sanofi will offer 1,050 koruna a share for the Czech drugmaker, 15 per cent higher than Zentiva's stock price on April 30th, the last day before PPF said it would bid.
Sanofi's offer beats PPF's 950 koruna bid by 11 per cent. Sanofi already owns about 25 per cent of Zentiva, and its bid values Zentiva at 40 billion koruna ($2.6 billion).
Sanofi bought its stake in Zentiva two years ago to boost its generic drug unit, which accounts for less than 2 per cent of its sales.
The Paris-based company joins rivals Novartis SA and Daiichi Sankyo Co. in adding copies of branded drugs alongside more expensive pharmaceuticals. The market for generic medicines is growing at twice the rate of patent-protected products as ageing populations and the rise of heart disease, cancer and diabetes swallows more public health-care funds.
PPF, the largest closely held financial group in the Czech Republic, yesterday said it may be willing to increase its offer. Zentiva said plans to call an investors meeting before PPF's offer period ends July 18th.
Zentiva spokeswoman Vera Kudynova and PPF spokesman Alexej Bechtin said they were unable to immediately comment when contacted by telephone today.
"This could be really the start of the bidding war," said Vladimira Urbankova, who analyzes Zentiva at Erste Bank in Vienna.