Teva Pharmaceuticals (TEVA) Close To Buying Ratiopharm

Bloomberg reports that Teva Pharmaceuticals Industries Ltd. (ADR) (NASDAQ: TEVA) is close to acquiring Ratiopharm for €3.5 billion. The acquisition would end a nine-month long takeover battle for Ratiopharm, which is the second biggest maker of generic drugs in Germany.

With the acquisition, Israel based Teva Pharmaceuticals would beat Pfizer Inc. (NYSE: PFE) and Iceland based Actavis Group hf, who are the other bidders for Ratiopharm. The acquisition will be Teva’s biggest since it acquired Barr Pharmaceuticals Inc. in 2008 and will position the company at the top of the $8.6 billion German generic drugs market. Frances Cloud, a London based independent analyst, said, “It’s the last major piece in the jigsaw for Teva in Europe. It will put them comfortably in the frame to deliver their 2015 targets for Europe.”

In Tel Aviv, shares of Teva were up 2.5%. Yossi Koren, Teva’s spokesman, declined to comment on the development. Expanding outside U.S., which is Teva’s largest market, has been part of CEO Shlomo Yanai’s strategy as the company plans to double its revenue to $31 billion by 2015. The company plans to increase its net income to $6.8 billion in five years time. Currently, Europe contributes less than 25% to Teva’s total sales.

Ratiopharm had been looking for a buyer since June 2009 after the company’s owner, Ludwig Merckle, sought to raise funds for repaying debt, which were accumulated by his father and the company’s founder, Adolf Merckle. The company had reported EBITDA of €307 million on revenue of €1.6 billion last year.