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Stada Board Recommends Acceptance of Improved Takeover Bid

Stada Arzneimittel’s headquarters in Bad Vilbel, near Frankfurt. The company manufactures generic and over-the-counter drugs.Credit...Alex Domanski/Reuters

LONDON — The German generic drugmaker Stada Arzneimittel said on Tuesday that its board of directors had recommended that shareholders accept a sweetened takeover bid by the private equity firms Bain Capital and Cinven, the latest in a series of takeovers in the industry in recent years.

The deal, which valued Stada at $4.8 billion, came after a bid in June by Bain and Cinven was unable to get support from 75 percent of shareholders. The new offer has a lower threshold for acceptance: 63 percent.

It follows a trend of consolidation in the sector, as drug companies have sought new products and greater scale in a bid to combat price pressure.

In April, Fresenius of Germany agreed to buy Akorn, a United States specialty generic drug maker, for $4.3 billion. In the past three years, Teva Pharmaceutical Industries of Israel has bought the generic drug business of Allergan, Hikma Pharmaceuticals of Jordan has acquired the generic drug business of the German company Boehringer Ingelheim, and Abbott Laboratories has sold its generic drug business in developed markets outside the United States to Mylan.

Stada, based in Bad Vilbel, Germany, manufactures generic and over-the-counter drugs. The company employed 10,900 people as of the end of last year and reported sales of 2.2 billion euros, or $2.6 billion, in 2016.

The company received two takeover offers through a structured bidding process earlier this year, eventually settling on a proposal from Bain and Cinven. But that offer attracted interest from those holding about 65 percent of Stada’s shares — below the original threshold for the deal to proceed.

Under the terms of the latest offer, the private equity firms would pay €65.53 a share for Stada, and investors would receive a dividend of 72 euro cents a share. The new bid valued Stada’s equity at €4.1 billion. Including debt, it would value Stada at €5.3 billion.

The drugmaker said that it had received commitments from investors representing about 20 percent of its outstanding shares for the new offer.

“The executive board has reached the conclusion that the current offer appropriately reflects both the enterprise value and the growth potential of Stada,” Engelbert Coster Tjeenk Willink, the Stada chief executive, said in a news release.

“Bain Capital and Cinven are two financially strong partners with extensive industry expertise who have committed themselves to our strategy and with whom the growth and profitability of Stada will be driven significantly forward in the coming years,” he added.

Mr. Willink assumed the chief executive role on an interim basis after Stada’s chief executive and its chief financial officer left the company this month for “personal reasons.”

Shares of Stada were up less than 1 percent in early trading in Germany on Tuesday.

Follow Chad Bray on Twitter @Chadbray.

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