Novartis inks $8bn generic deal

Novartis AG agreed to buy German generic-drug maker Hexal AG and its US affiliate Eon Labs for about $8.3 billion in cash to become the world's biggest maker of generic medicines, according to a report on the website of Bloomberg.

Novartis, Europe's fourth-biggest pharmaceutical company, will pay 5.65 billion euros ($7.4 billion) for the closely held Hexal and a 67.7% stake in Eon. The Basel, Switzerland-based company will start a tender offer to acquire the rest of Eon for $31 a share, or about $1 billion, the report said.

Novartis chief executive Daniel Vasella is seeking 10% of the market for generics with the purchase, Novartis's biggest since the company's creation in a 1996 merger. Novartis's Sandoz unit, its slowest growing division last year, will surpass Israel's Teva Pharmaceutical in a market that Vasella expects to grow to $100 billion in sales by 2010, the report said.