After six months of negotiations, New Jersey-based Barr Pharmaceuticals Inc. has acquired over 70% of Pliva Pharmaceuticals, Croatia’s largest drug company. The deal was finally closed earlier in October. Pliva, s regional leader in the industry, has more than 80 years of tradition behind it. Once the deal is officially closed, Barr will become the third largest producer of generic drugs in the world.
Barr had to pay $2.6 billion to take over the Croatian company. Its offer was challenged by another competitor — Iceland’s Actavis. Following a bidding war that increased the value of Pliva shares, Barr managed to finally deposit 13.5 million shares, or 72.6% of the company.
Shareholders were able to sell their shares for $140 each. By contrast, prior to the acquisition, the price of Pliva shares on the Zagreb Stock Exchange was $90.
Pliva will still carry its name and brand. The company in Zagreb will do business with European partners and will sell its product mainly on the European markets.
Both Pliva and Barr stand to profit from the acquisition, say financial experts. However, some within Croatia have criticised the sale, including former Economy Minister Ljubo Jurcic. He says Pliva should remain a national asset that would continue its research work and maintain its international reputation.
However, the firm has been unable to withstand market pressures in recent years. In the middle of the 1980s, Pliva was in its golden period — producing drugs, researching new ones and buying other pharmaceutical companies in the former Eastern bloc. It had laboratories and research facilities in the former Czechoslovakia, Poland and Hungary.
During the 1990s it maintained a stable level of production, but did not introduce new products to keep up with international competitors. Pliva’s most famous drug remains the antibiotic Sumamed, widely known among European physicians and consumers.
When the company announced it would sell its research centre, it was clear that Pliva no longer planned to introduce new drugs, but would simply continue with its existing product line. It soon became apparent that Pliva would do better under the auspices of a larger and stronger company.
Pliva operates in over 30 countries worldwide and is the leading pharmaceutical company based in Central and Eastern Europe. It specialises in the development, production and distribution of generic pharmaceutical products, including biologicals, cytostatics, and other generics.