Sanofi Makes Offer for Generic Firm Zentiva

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Sanofi-Aventis (SNY) plans to make a $2.57 billion (10% premium) offer for Czech generic drugmaker Zentiva, trumping a bid from financial group PPF. Sanofi’s move on Zentiva follows Daiichi Sankyo’s $4.6B offer for India’s top generic company, Ranbaxy.

Generic drug production has traditionally been shunned by large pharmaceutical companies but is now receiving increased interest as a way to tap booming emerging markets.

I’m a huge fan of diversification, especially in an industry where there is nearly none. I’d be really surprised not to see more of these deals in the next few years. There is just too much upside for big pharma not to act, but then again, cutting off the nose to spite the face isn’t a foreign concept in this industry.