Greater Pacific Capital in lead for Merck unit

The highest bid for the generics unit of family-controlled German pharmaceutical company Merck KGaA has been launched by a private equity consortium led by the British buyout outfit Greater Pacific Capital.

As well as Greater Pacific, the consortium, which is expected to offer somewhere in the region of €3.6bn, is thought to include India’s Torrent Pharmaceuticals, Fortress Group and Tudor Investments.

Greater Pacific Capital was founded in 2005 by former Goldman Sachs employees Ketan Patel, Joe Sealy and Francis Crispino.

Rival bidders for Merck KGaA’s unit include Israel’s Teva Pharmaceuticals and US-based Mylan Laboratories. Apparently, previous bidders have dropped out of the bidding process. These were said to include Icelandic generic drug producer Actavis and another private equity consortium formed by Apax Partners and Bain Capital.

In April, Merck KGaA’s outgoing chief executive Michael Roehmer said at the annual meeting that no decision had yet been made on whether to proceed with the sale. He stressed that the disposal would be “the right step for the future of the company”, as Merck concentrated on its remaining branded medicine, consumer healthcare and chemicals divisions.

Merck appointed Bear Stearns to handle the sale of its generics division in February. The sale of the division would contribute towards the cost of its takeover of the listed Swiss biotechnology firm Serono in a transaction launched in 2006 and valued at €10.2bn.

Merck KGaA surprised the markets by acquiring Serono shortly after its failed hostile bid for German pharmaceutical firm Schering, which was acquired by German peer Bayer for a consideration of €17.3bn.

Alex Wessendorff