Pliva

"Later that year, in August, I met Steve again. I had just taken Actavis private in a €5.3 billion deal that Deutsche Bank was rolling €4 billion into. This deal could so easily have plunged Germany’s biggest bank into serious financial difficulties. I had built Actavis into one of the world’s biggest generic pharmaceutical companies in a competitive and consolidating industry. As industry consolidation quickened after 2006, I felt we had to decide quickly whether we were going to become predator or prey. Both could have worked, but we decided that because of the state of the lending markets we were going to become predators, leveraging up Actavis and buying other companies. We bid for a Croatian generics company, Pliva, which ended up being bought by a US company, Barr Pharmaceuticals, and went a long way down the line to try to buy the generics division of Germany’s Merck. Bankers fell over themselves to provide debt and convince us to bid and, although we ended up backing away from the price being asked, we had credit lines of €3.4 billion–€4 billion committed on a potential deal. This opened my eyes to the amounts that banks were willing to lend on such deals, so I decided to use that arsenal of debt to buy the 60 per cent of Actavis that I did not already own."

"I was in New York for a board meeting and I met up with Siggi in the Waldorf Astoria Hotel to flush out what Watson’s ideas were. Joining us in the meeting was Watson’s chief executive Paul Bisaro. As they began to describe their vision for the company and the sector, I couldn’t help but smile at the irony of it. Paul and I had crossed swords before in the very public battle for the Croatian pharma company Pliva, where we had each fought with every trick we knew. He had won and I had lost. That was water under the bridge, and I explained the situation for each of the stakeholders in Actavis. Deutsche Bank was looking for no risk at all, while my Novator vehicle was willing to look at the big picture in terms of future value creation. Watson’s idea was to pay with cash and stock, and clearly that would not work for Deutsche, even if it could work for us. I needed to find a way to make this work for both the bank and Novator. As they say, the devil is in the detail."

"For example, Actavis made a hostile bid for Pliva, a large international pharmaceuticals company based in Croatia, in 2006. The chief executive didn’t want our takeover and got a US drugs group, Barr Pharmaceuticals, to counter-bid for it as a ‘white knight’. Soon it became clear that the public relations strategy was to focus on my time in Russia, with Barr hiring Kroll, an investigations agency, to help it in a PR battle."