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Home Industry News Sanofi-Aventis buys into Zentiva

Sanofi-Aventis buys into Zentiva

27th March 2006

French company Sanofi-Aventis has bought nearly a quarter of Czech generic-drugs firm Zentiva.

With a ?430 million, 24.9 per cent stake, Sanofi will be the largest investor in the Prague-based company as the world’s third-biggest pharmaceutical firm expands into Eastern Europe and Russia.

“This transaction will allow us to create a long term relationship with Sanofi-Aventis, which will enable us to accelerate and support the growth of Zentiva in our core countries,” said a “delighted” Zentiva chairman Jiri Michal.

He added that the “complementary organisations” will foster a “long-term relationship” of growth.

Zentiva makes generic-drugs, a market that is expected to grow to $100 billion by 2010 as companies and governments turn to these products to save costs.

Profit margins are generally lower though for manufacturers of generic drugs, with mergers in this sector increasing as companies work together to produce an economy of scale.

However, markets for generic drugs in Eastern Europe are growing, with Zentiva reporting that it doubled its sales in Poland and Russia last year.

Following the purchase, Sanofi will now hold a stake in treatments for heart disease, central nervous system illnesses and inflammation, as well as cholesterol-lowering agent Simvacard amongst others.

track© Adfero Ltd

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