Ranbaxy Laboratories Bids for Merck''s Generic Unit

India's largest generic drugs maker, Ranbaxy Laboratories Ltd, has offered to buy the Darmstadt-based Merck KGaA's generic-medicines division, valued by Credit Suisse at $6 billion. Stada, Teva.

The German company is hiving of its generic unit to concentrate on branded formulations. Merck Generics makes copies of asthma treatments such as GlaxoSmithKline Plc's Ventorlin and is the world's fourth-largest producer of generics. It is also the largest generic-drugs maker for sale since the acquisition of Ivax Corp by Teva for $7.6 billion last year.

Ranbaxy submitted its bid yesterday for the Darmstadt-based Merck KGaA's business unit. A successful bid would enable Ranbaxy gain access to Europe, the world's second-largest pharmaceuticals market.

Ranbaxy has been on an acquisition spree in Europe, but last year it was outsmarted by Dr. Reddy's Laboratories Ltd. for the acquisition of Betapharm Arzneimittel GmbH.

A deal with Merck could immediately make Ranbaxy the world's third-largest generics company by sales, behind only Teva Pharmaceutical Industries Ltd. of Israel and Sandoz, the generics business of Switzerland's Novartis AG.

Ranbaxy believes that acquisitions in the US and Europe would enable it to cut distribution costs to boost sales of its generic portfolio and enter the global big league.