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Novartis is buying generic-drug makers Eon Labs and Hexal for a total of $8.3 billion in cash.

This will make Novartis the largest maker of generic medecines in the world.

According to a Bloomberg News article,

"Novartis, Europe's fourth-biggest pharmaceutical company, will pay 5.65 billion euros ($7.4 billion) for closely held Hexal and a 67.7 percent 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.

Chief Executive Daniel Vasella is seeking 10 percent of the generics market with the purchase, Novartis' biggest since the firm was created in a 1996 merger, he said. Novartis' Sandoz generics unit, its slowest-growing division last year, will surpass Israel's Teva Pharmaceutical Industries in a market Vasella expects to grow to $100 billion in sales by 2010."

"The generics area was a problem for Novartis, and with this acquisition they have resolved that problem with a quantum leap," said Swisscanto Asset Management portfolio manager Dieter Winet.

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