Stada Merger Plans May End In Acquisition

BMI View: News that Stada Arzneimittel is considering merging with a similar-sized branded or biotechnology drugmaker is unlikely to be viewed positively in the equity markets in the short term. Investors may see the news as a further indicator of the extent of challenges faced by the firm. However, there is potential for the news to act as a trigger for hostile acquisitions by a larger global drugmaker. While it seems that Stada management are looking for a merger with a similar partner, they may not have a choice. Stada is currently trading at a particularly low price and price per earnings ratio, and short-term profitability may mean the company looks unattractive to small investors. However, it would be more attractive to larger firm looking for a company with exposure Central and Eastern Europe.

To read the full article, please choose one of the following options: