Merck generics unit sale could hit $7.5billion

simone roberts

Malvinder Singh, chief executive at the generics giant Ranbaxy, said the reports were “factually incorrect and speculative”.

“Ranbaxy wishes to clarify that it has made a non-binding bid for the asset, at a value it considers fair and reasonable,” Mr Singh said.

“We are looking to evaluate the asset and are going to be very practical about it. We are not in a rat race for acquisitions but are focused on creating value for our shareholders.”

German chemicals and drugs group Merck KGaA received multiple first-round offers for its generics drugs unit.

Bids were also received from Israel’s Teva Pharmaceutical Industries, Iceland’s Actavis, US-based Mylan Laboratories and a private equity consortium which includes rival Cipla.

The Merck business, which is no longer core to the German firm after its acquisition of Swiss biotech company Serono, is seen as a prize asset because of its foothold in many markets.

It sells a wide range of more than 400 medicines in Australia, Europe, North America, Brazil and South Africa.

Analysts have said in recent reports that the operation could fetch 4.5 billion euros ($7.57 billion) or more, and most analysts see 4 billion euros ($6.73 billion) as a floor for offers.

The global generic drugs business has seen a wave of mergers and acquisitions recently, as companies seeks increased scale and geographical spread to take advantage of rising demand from governments and insurers for cheaper non-patented medicines.

Merck’s generics business was the world’s third-largest in 2006 with sales of some 1.8 billion euros ($A3.05 billion).

Merck is hoping to close the sale by May or June, sources said.