Deals of the year: Central and Eastern Europe
Euromoney, is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2024
Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Deals of the year: Central and Eastern Europe


Western Europe         Asia        Latin America        North America



Best M&A deal
Novartis
Deal type: acquisition of Lek
Amount: e876 million
Date: October 2002
Advisers: Bank Austria (Novartis), ABN Amro (Lek)






Lek: its production capacity and
range of generic drugs means that
it fits well with Novartis's strategy

Some of the biggest pharmaceutical companies have been exiting from the generics business but Novartis has made it clear that it intends to expand its share. The world's second-biggest pharmaceuticals company believes that the patent explosion of the past five years is slowing, and that a good toehold in generics will help it to undercut rivals, particularly arch-rival GlaxoSmithKline (GSK), the biggest pharmaceuticals company.

One of GSK's best-selling drugs is Augmentin, which is used to treat pneumonia and sinusitis. Revenues from this drug last year were around $2 billion. Novartis has been producing a generic version of the drug in Switzerland, but production capacity has been reached.

Slovenian company Lek made sense as an acquisition for Novartis for three reasons. It had the capacity to make lots of generics cheaply, it made its own generic version of Augmentin and of other big drugs made by Novartis's rivals, and it gave Novartis a stronger presence in central and eastern European markets.








Gift this article