FRANKFURT (AP) — Israeli drug maker Teva has beaten out rivals Pfizer and Actavis to acquire German generic drug maker Ratiopharm GmbH — in a deal announced Thursday worth some €3.6 billion, or nearly $5 billion.
Teva Pharmaceutical Industries Ltd.'s successful bid will give it the top spot in the lucrative German generic market and is the second big acquisition in two years for the company. Its last major purchase was Barr Pharmaceuticals Inc. for some $7.4 billion.
The deal, which is being paid for with cash and credit, is subject to regulatory approvals but is expected to be complete by the end of the year. Teva had been bidding for the company amid reports that Ratiopharm was also being courted by U.S. drug maker Pfizer Inc. and Iceland's Actavis Group.
Ratiopharm was put up for sale by its owners, the Merckle family, earlier this year as they sought to pay down debts incurred by Adolf Merckle, who killed himself in January 2009.
"The separation of Ratiopharm is a painful step for us as the founding family," said Ludwig Merckle, Adolf's son — but he said he was "confident that this is a good solution."
"I believe that joining forces with the world's largest generic company will enable Ratiopharm to continue its path of growth and success," he added.
Teva is among the largest pharmaceutical companies in the world. Like Ratiopharm, it makes generic drugs; more than 80 percent of its sales are in North America and western Europe.
"This transaction is perfectly aligned with our long-term strategy in which Europe is an important pillar and growth driver," Teva Chief Executive Shlomo Yanai said in a statement.
"Ratiopharm will provide us with the ideal platform to strengthen our leadership position in key European markets, most notably in Germany, as well as rapidly growing generic markets such as Spain, Italy and France," he added.
Ratiopharm is one of Europe's biggest producers of generic drugs, along with German rival Stada and Switzerland's Novartis.
It sells about 750 medicines and has nearly as many awaiting approval from regulators, indicating strong growth prospects. The company has offices in 24 countries and sells products in 34.