Novartis says that the European Commission has cleared its purchase of privately-held German generics company, Hexal, and that the deal is expected to close early next month.
However, this regulatory clearance is not without its conditions, and Novartis has agreed to sell off certain pharmaceutical products in Poland, Denmark and Germany to remedy the EC’s competition concerns. Competition commissioner, Neelie Kroes, stated: ”Effective competition through generic medicines is important for health care systems across Europe, and ensuring continued competition from generics is vital to keeping downward pressure on health care costs. The commitments given by Novartis will maintain this competition and ensure that consumers continue to benefit from a choice of suppliers and lower prices.”
The Swiss company first announced its 5.7 billion-euro purchase Hexal, and its partner, Eon Labs of the USA in February this year [[21/02/05b]], and has since launched a tender offer to acquire the latter’s publicly-held shares. The tender offer, set at $31.00 per share, is scheduled to expire on June 20, and is subject to both the completion of the regulatory process and the purchase of a 67.7% stake in Eon Labs from its control shareholder. Novartis is also in the process of responding to a request from the US Federal Trade Commission for additional information regarding the acquisition of Eon [[11/04/05c]].
Hexal will be integrated into Novartis’ Sandoz division as part of a bid to create the world leader in the generic drug industry. Following the acquisitions, Sandoz will be a leader in generic pharmaceuticals in Germany and in several other key regions, and will have a strong presence in Asia and Latin America.