Sanofi-Aventis’ proposed acquisition of Czech generics drugmaker Zentiva has cleared a fresh legal barrier but the deal is still not in the bag.

Last week, the European Commission gave its approval to the deal on condition that Sanofi divests fifteen drugs in the Czech and Slovak Republics, Romania, Bulgaria, Hungary and Estonia. Sanofi first made an offer of 1,050 Czech crowns per share for Zentiva in July, but then upped the bid to 1,150 crowns, which valued the firm at around $2.3 billion.

This was accepted by the Zentiva board but the deal faced opposition from financial group and shareholder PPF, in tandem with Italian insurance group Generali, which had had a 950 crowns offer rejected by Zentiva in June 2008. PPF then sued Zentiva’s board in an Amsterdam court in a bid to force its own e xtraordinary general meeting of shareholders.

However, speaking at Sanofi’s press conference in Paris, Hanspeter Spek, executive vice president for pharmaceutical operations, confirmed to PharmaTimes World News that the lawsuit has been withdrawn and the French drugmaker is proceeding with its offer which expires on February 20. Still, 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.

As things stand, Sanofi has a stake of around 25% and the Zentiva board is committed to selling its 6% holding. Mr Spek, noting that Czech firm’s share price is currently well down on Sanofi’s offer, added that a large institutional investor is close to offering up its stake, taking the company to a holding of around 40%.

There is still, therefore, some way to go but Mr Spek said that Sanofi is still very confident that the deal will go through. The firm said earlier this week that buying Zentiva will accelerate its strategy of growing in emerging markets and it has made “certain commitments” to Zentiva’s employees. By Kevin Grogan in Paris