According to Reuters, the three drugmakers top a 12-strong list of bidders that includes US drug giant Pfizer, generics firms Actavis and Mylan and a number of bank-backed private equity investors.
Also though to be in the race is US firm Watson Pharmaceuticals, which gained rights to sell a generic version of Pfizer’s world leading hypertension drug Lipitor (atorvastatin) in 2011 with its purchase of Arrow earlier this week.
While specific details of the bids have not been disclosed, offers are believed to be in the €2bn (€3bn) to €2.5bn range, which is significantly below the €3.5bn figure sought by Ratiopharm's owners, the Merckle family.
VEM, the investment vehicle set up to handle the sale of Ratiopharm, has not commented on the bid speculation. However, according to Bloomberg, the group is expected to announce which suitors have progressed to the next round next week.
Shape of M&A battles to come
While none of the firms named have yet confirmed their interest in Ratiopharm, it would not be a surprise if Big Pharma players are indeed battling it out with traditional generics producers given recent industry trends.
The last few years have been characterised by both mega-mergers, Pfizer-Wyeth and Roche-Genentech to name two, and Big Pharma acquisitions of, or deals with, generics firms.
For example, both Pfizer and GlaxoSmithKline (GSK) have signed agreements to sell off-patent generics in emerging markets, following the pattern set by Novartis’ with its Sandoz business several years ago.
And more recently, Sanofi acquired Laboratorios Kendrick and Medley, GSK bought shares in Aspen Pharmacare and Novartis purchased Ebewe Pharma’s non-branded injectables unit.
The consensus explanation for such deals is that buying into the non-branded drug sector represents a way for Big Pharma to access emerging pharmaceutical markets and diversify its product portfolios ahead of blockbuster patent loss.
Quite how the generics sector will react to this encroachment is unclear although, given Big Pharma's hunger for deals, it seem likely that major non-branded players will need to respond to protect market share.