Sanofi-Aventis' proposed takeover of Zentiva is a step closer to success after its only rival for the Czech generics company dropped out of the race.

The withdrawal of Dutch financial group PPF's bid could clear the way for Sanofi to acquire Zentiva, but the French pharma company faces some hostility due to the value of its offer.

Sanofi already has a 24.9% stake in Zentiva, and wants to increase this to more than 50% before it will follow-through on its offer.

If successful it would significantly increase Sanofi's presence in the central and eastern European generics markets and see the company gain a portfolio of more than 400 products.

But although Sanofi outbid rival PPF, Zentiva has so far cautioned investors against accepting the pharma firm's advances, saying they "fail to reflect the company's underlying value and future prospects".

Sanofi has offered 1,050 crowns per share, valuing Zentiva at 40.04 billion crowns (£1.4 billion), but the generics company has recently seen an up turn in its fortunes that put Sanofi's offer below current market rates.

Zentiva's sales in the first half of this year grew by 32% to 8.9 billion crowns (£310 million), driven by the acquisition last year of Eczacibasi, the third largest Turkish generics company.

Zentiva now claims leading positions in the Czech Republic, Turkey, Romania and Slovakia, and says it is growing dynamically in Poland, Russia, Bulgaria, the Ukraine and the Baltic countries.

pharmafocus@wiley.com