At long last, it looks as though Sanofi-Aventis’ proposed acquisition of Czech generics drugmaker Zentiva coud soon be completed after the European Commission gave its conditional approval to the deal.

The Commission gave the green light to the buy on condition that Sanofi divests fifteen drugs in the Czech and Slovak Republics, Romania, Bulgaria, Hungary and Estonia. The French drugmaker has agreed to do so, noting that the divested products “collectively generated annual sales of approximately 18 million euros in 2007, an amount which was less than 3% of Zentiva’s turnover for that year.

Sanofi first made an offer of 1,050 Czech crowns per share for Zentiva in July, which valued the firm at around $2.7 billion, but then upped the bid to 1,150 crowns. This represented a 25.5% premium to the price of Zentiva’s stock on April 30, 2008 and was accepted by the board.

The deal was later authorised by the Czech National Bank but faced opposition from financial group PPF, in tandem with Italian insurance group Generali, which had had a 950 crowns offer rejected by Zentiva in June. PPF then increased its holding in Zentiva. from 19.2% to 21.6%.

As for getting European approval, Sanofi says hich the decision will allow the offer to proceed and it expires on February 20. The bid remains subject to a minimum tender condition of over 10.3 million shares, giving the Paris-based firm more than half of Zentiva’s share capital and voting rights.

Sanofi plans to terminate Zentiva’s listings on the London and Prague stock exchanges as soon as possible and initiate the statutory squeeze-out procedure to acquire all stock held by minority shareholders. The company added that it is “committed to the expansion of its presence into emerging markets that are
characterised by high growth, low and medium disposable income and affordable pharmaceutical products”.

Buying Zentiva will “constitute an exceptional opportunity to accelerate this strategy”, Sanofi said, noting that “certain commitments” have been made regarding the firm’s employees. Jiri Michal will continue as Zentiva chief executive once the deal is finally sealed.

However it seems that PPF will not go down without a fight and is suing Zentiva’s board in an Amsterdam court in a bid to force its own e xtraordinary general meeting of shareholders. PPF is looking to replace the board with its own directors.

Zentiva, noting that an EGM with a previously-announced agenda will be held on February 9, added that the legal proceedings that PPF has initiated “are entirely without merit”.