The first generics casualty of the financial crisis was Ratiopharm which is now being sold my the Merckle family to make up for their recent stock market losses. Now Actavis, the fifth largest generics company in the world, finds itself also up on the chopping block. According to the FT, Thor Bjorgolfsson, the owner of Actavis, has given Bank of America Merrill Lynch the mandate to sell the company at a target valuation of $8 billion so as to cover the debts to various banking institutions such as Deutsche Bank.

Many in the industry had questioned the viability of the unbelievably rapid expansion policies of the Actavis group. Fueled by debt, Actavis transformed itself through acquisitions from a small Icelandinc distributor named Pharmaco into the giant that it is today.

The acquisition spree started with the the purchase of Balkanpharma in 1999 and continued at a fast pace for the next decade. While we believe that it won’t be a problem to sell the company, especially given the increasing interest of innovator companies to get into the generics game, it is unlikely that they will be able to achieve their target price in this depressed economic situation. In any case it will be interesting to see over the coming year what will happen to the groups agglomeration of purchased companies; will they be retained within a group structure by the new owner or will they be sold off in pieces or even shut down completely. Leave your opinion in the comments.