Novartis to Buy Generic Drug Companies
Novartis plans to expand its presenceas a maker of generic drugs withthe purchase of Hexal of Germany andits New York affiliate, Eon Labs, for areported $8.4 billion in cash. Hexal isthe second-largest generic drug manufacturerin Germany.
The purchase would give Novartis amuch bigger piece of the generic drugpie. Hexal would bring Novartis >120new products, including painkillersand cholesterol drugs. Eon would bringa low-cost copy of a popular antidepressant(bupropion) and an extensivepipeline of new generic drugs.
The acquisition will occur in stages.Novartis already has signed an agreementto pay $7.4 billion for all ofHexal and for 67.7% of Eon. After thetransaction closes (scheduled for thesecond half of 2005), Novartis plans tooffer $31 a share, or about $1 billion,for the rest of Eon.