(Adds Zentiva response, further background)
By Sudip Kar-Gupta
PARIS, June 18 (Reuters) - French drugmaker Sanofi-Aventis
<SASY.PA> plans to make a 40.04 billion Czech crown ($2.57
billion) offer for Czech drugmaker Zentiva <>, trumping
a bid from financial group PPF.
The move would take Sanofi deeper into the field of generic
drug production, an area which has traditionally been shunned by
large pharmaceutical companies but is now receiving increased
interest as a way to tap booming emerging markets.
Sanofi -- already a key shareholder in Zentiva -- said on
Wednesday that it was planning to offer 1,050 Czech crowns for
each Zentiva share.
Zentiva is already the subject of a bid from Czech group PPF
which has offered 950 crowns per share.
Zentiva shares were up 5.58 percent at 1,098 crowns at 0831
GMT.
Sanofi's offer represents a premium of around 10.5 percent
to PPF's bid and the French company, which is the world's
third-largest drugmaker by sales, said buying Zentiva made
strategic sense.
"Sanofi-Aventis is already established in the various
markets where Zentiva operates. The intended acquisition of the
control of Zentiva carries a strong strategic rationale," Sanofi
said in a statement.
Zentiva is a dominant supplier of generic, or unpatented,
drugs in the Czech Republic and Slovakia. It also has
subsidiaries in Romania and Turkey.
Zentiva said it had no immediate comment on Sanofi's planned
counterbid and would issue a statement later on Wednesday.
On Tuesday, Zentiva told shareholders to take no action for
now concerning PPF's bid, adding it would call for a shareholder
meeting.
GENERIC DRUGMAKERS IN VOGUE
Sanofi owns 24.9 percent of Zentiva. PPF, together with
allies such as Italian insurer Generali <GASI.MI>, owns 19.2
percent.
PPF, controlled by the Czech Republic's richest businessman
Petr Kellner, said it would proceed in line with the terms of
its own offer.
Sanofi's move on Zentiva follows a surprise $4.6 billion
agreed bid last week by Japan's Daiichi Sankyo Co Ltd's <4568.T>
for top Indian generics company Ranbaxy Laboratories Ltd
<RANB.BO>.
The spurt of activity shows branded pharmaceutical
companies, who make their money from selling patented medicines,
have a major appetite for generic drugmakers despite concerns
about differences in their business models.
Big pharmaceutical groups have encountered a wave of
product setbacks and political uncertainty that have sent many
of their stocks to multi-year lows.
Acquiring companies that specialise in making low-cost
generic drugs would allow them to diversify, target developing
markets and seize on international efforts by governments to
promote generics to cut healthcare expenses.
Only Switzerland's Novartis <NOVN.VX> among large brand
firms has fully embraced generics through its Sandoz unit, which
is among the world's largest generic makers.
Sanofi shares closed Tuesday at 42.05 euros, giving the
French company a stock market value of around 55 billion euros.
(Additional reporting by Ben Hirschler in London and Jan
Korselt in Prague; Editing by Quentin Bryar)
