German generic drugmaker Stada has announced a takeover bid for Serbian pharmaceuticals group Hemofarm, shortly after selling its US operations and retrenching to the European market.

The news backs up Stada’s often-voiced assertions that it will remain independent, despite repeated rumours that the German drugmaker is a target for takeover itself in the rapidly consolidating generic drug sector. And other acquisitions may be on the cards, according to chief financial officer Wolfgang Jeblonski.

Stada has submitted a public takeover offer to the Serbian authorities for all 3.3 million shares of Hemofarm at a price of 146.97 euros, valuing the Serbian company at around 485 million euros ($618m), and the latter companies’ management has welcomed the move.

The deal is only valid if a minimum of 67% of the shares are sold within the framework of the public takeover offer, which expires 21 days from the time the offer was first made public on July 14. Stada says it already has commitments to sell from owners of around 59% of Hemofarm.

Hemofarm has been growing fast in recent years, helped by the booming economies in Central and Eastern Europe (CEE) markets. In 2005, the firm increased its sales in the local currency terms some 30% to around 206 million euros. In the same period, net income rose by approximately 89% to 27.3 million euros.

Hemofarm is the clear market leader in the Serbia and Montenegro, which together account for 62% of group sales, with important export markets for the company including Commonwealth of Independent States countries, including Rusia, Bosnia and Herzegovina and Romania.

In 2005, Hemofarm had 27 subsidiaries in 11 countries and employed 3,625 people, with five production facilities in various East European countries.

Generic drugmakers have been interested in acquiring Eastern European players, both to tap into the growing market for drugs in these countries but also to access low-cost production facilities that can be used to supply the rest of Europe.

For example, Actavis of Iceland and US generics firm Barr are locked in a bidding war to gain control of Pliva, based in Croatia and thought to be the biggest Eastern European drugmaker, while Actavis recently purchased Romania’s Sindan for 148 million euros, Hunhary’s Keri Pharma and Higia of Bulgaria.

Meanwhile, Sanofi-Aventis recently paid 430 million euros for a quarter-stage in Czech firm Zentiva. Although not a major player in the generics market, Sanofi-Aventis has established its own generics division, Winthrop Medicines, and said last year it plans to launch at least 30 generic medicines, including copycat versions of Sanofi-Aventis brands about to lose their patents.

Stada said its purchase of Hemofarm was “an important strategic step in the expansion of sales activities to Eastern Europe.”