Stada keeping quiet on Merck Generics takeover

German generics group Stada Arzneimittel has declined to comment on reports that it is bidding for Merck KGaA's generics unit, refusing to confirm that it is in talks over a deal. Stada chairman Hartmut Retzlaff has said an acquisition of this kind would be perfectly conceivable but any deal would have to make overall sense.

Analysts have doubted whether Stada could handle such an operation in financial terms. Its market valuation is currently about 2.6 billion euros ($3.5 billion) while Merck-Generika is valued at over 4.0 billion euros. Stada's biggest acquisition to date was the Serbian pharma enterprise Hemofarm for 494.0 million euros. Stada has maintained, however, that it does not lack the means for a larger acquisition even though its net indebtedness after the Hemofarm deal virtually tripled to 773.0 million euros. The finance spokesman Wolfgang Jeblonski said credit lines of up to 500.0 million euros were available while business in eastern Europe and Turkey is currently being expanded rapidly. Last year, Stada's profits rose 78% to 91.8 million euros.