ratiopharm to become the hub for Teva's European growth strategy

Teva Pharmaceutical Industries Ltd.The ratiopharm Group gets a new owner. Subsequent to an extensive bidding process, the Israel-based company Teva Pharmaceutical Industries Ltd. is going to acquire the Ulm based company from Merckle Group's VEM asset management. The agreed enterprise value is € 3.625 billion. The representatives of both companies have signed in Cologne the purchase agreement. In the sales process ratiopharm impressed with the outstanding expertise of the over 5,500 employees, with the high efficiency and quality of the production and with the strong market position in Europe and Canada.

ratiopharm has been recognized by all three remaining bidders in the sales process as a pioneer in the German generics market, and particularly as an international valuable brand. "The final selection proved to be extremely difficult, but convenient for us," the VEM mandated managing director for the bidding process Hans-Joachim Ziems said. "All companies have approved their incredible interest in almost same conditions. We have emphasized from the beginning that the purchase price, of course, but also the strategic concept of the integration of ratiopharm in the acquiring company plays a central role."

With ratiopharm Teva is expanding its position as the largest generic pharmaceutical company with round about 40,000 employees and worldwide sales of 16,2 billion euro. In addition, this acquisition creates the European leader in the generics business. Both the products and in the markets make an excellent strategic fit for both companies. Teva's strong presence in the Asian and U.S. market is complemented by ratiopharm's strength in Europe and Canada. Teva is planning to maintain all manufacturing plants and also to expand ratiopharm as the German headquarter of the combined entity and the hub for its European growth strategy with significant extensions of production. "Besides the technical skills of the workforce we are particularly impressed of the quality and efficiency of production plants in international com-parison," said Shlomo Yanai, CEO of Teva.

Also, the management of the ratiopharm Group is highly satisfied with the election of the new owner. "For ratiopharm, Teva is a natural fit, with its international focus and our shared generic vision. We are convinced that together we can gain enormous growth potential in all markets. Being a part of the Teva family will enable our management team and employees to continue to grow our business and fully materialize the great talent we have at ratiopharm," says Oliver Windholz, CEO of ratiopharm Group.

With this sale, one of the largest disinvestment processes in the German economy is coming to an end. Hans-Joachim Ziems was the chief responsible person for the sale together with Dr. Martin Stockhausen, trustee of VEM and Partner of the business law firm Görg. Mr. Ziems describes the conclusion as a success for all parties: "When we began to prepare the proceedings over a year ago, there was skepticism about the prospects of the ratiopharm sale due to the global financial crisis. Now, we have succeeded in putting the company under the stra tegic umbrella of Teva as a prosperous unit, while taking into account the interests of the employees, of VEM and of the Merckle Group’s creditors." The necessary approval by the European Cartel Authority will be expected in the 3rd quarter of 2010.

For VEM, Freshfields Bruckhaus Deringer LLP were responsible for legal counseling. Commerzbank and RBS acted as Investment Banking Partners for this transaction.

For more information on ratiopharm's business development in 2009: According to the Financial Statements 2009, the EBITDA for the generic busi-ness of the ratiopharm Group outperformed with 307 million euro both, the previous year's result as well as the planning. The company's turnover has maintained with 1.6 billion euros on the previous year's level.

Above all, the international business, which has risen to over 50 percent of the total turnover, has been contributing to the very good annual result. Similarly the business in the German market developed better than expected, due mainly to very successful launches of new prescription drugs. The businesses with over-the-counter (OTC) medicines, in which the strong brand ratiopharm plays a particularly important role, has developed positively over the last year. The result of the hospital sector could be risen by 20 per cent increase over last year. Within the project "ONE ratiopharm" to increase income and efficiency, important measures were implemented in 2009. For example, the concentration of global purchase had a huge positive impact on earnings.

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