The Hindu : Business : Novartis buys out two generic firms

Online edition of India's National Newspaper
Tuesday, Feb 22, 2005

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Business

Novartis buys out two generic firms

BASEL, FEB. 21. The Swiss pharmaceutical group Novartis said today that it had bought the German firm Hexal and its U.S. counterpart Eon Labs in a $5.65 billion takeover deal aimed at making it the world's top generics maker.

The Swiss group had signed `definitive agreements' to take over 100 per cent of Hexal and buy a 67.7 per cent stake in Eon Labs, a U.S. generics company that has a strategic partnership with the German firm, Novartis said in a statement.

The Swiss group said it would become `the global leader' in generics — cheaper non-branded medicines where the patent rights have lapsed — following the takeover with combined sales of $5.1 billion, based on 2004 data.

"Generic drugs are crucial to meeting the health care needs of patients in industrialised and developing countries as cost pressures continue to mount due to the ever-increasing demand of an ageing population," Novartis chief executive, Daniel Vasella, said.

Novartis said it would launch a tender to buy the remaining stake in Eon at $31 per share, which is equivalent to about $989 million for the package of 31.9 million shares.

It expects to achieve cost savings through synergies of $200 million within three years of finalising the overall deal. — AFP

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