The is the single largest US investment in Croatia and the region, which will have a positive impact on Croatia's image among potential foreign investors to the effect that Croatia is ready and safe for foreign investments, Covic said.
Barr's investment is also important because a merger with a financially powerful partner ensures a better position on the market, while on the other hand Pliva's production facilities will remain in Croatia, which is expected to result in new jobs and production growth, he added.
According to Covic, Pliva is currently producing at about 40 per cent of its capacity, and Barr is expected to raise its production capacity to 100 per cent, which will require construction of new production facilities.
Covic also expects that Barr's takeover will have a positive impact on the Croatian drugs market in that the appearance of Barr's generics on it will bring down the prices of medicines. Pliva will keep its name and will be Barr's centre of operations for Europe. It is also expected that Pliva's profitability will increase with its improved position on the market and that its products will be more available in the United States.
The President and Chief Operating Officer of Barr Pharmaceuticals, Paul M. Bisaro, said that Pliva was the best partner Barr could find. He said that Covic would remain Pliva's CEO, and that within Barr Group Pliva would be responsible for the development and expansion of operations in Europe and for the sale of selected proprietary drugs on key European markets.
Bisaro said that the integration of Pliva and Barr had produced the third largest global pharmaceutical company, with USD2.4 billion in revenue, operations in more than 30 countries and 8,000 employees.
He announced that the shares of the new company would be primarily listed on the New York Stock Exchange and that it would also have secondary listings on the Zagreb Stock Exchange if conditions were met for that.
Speaking of investments in Croatia, Bisaro announced a pilot installation for the commercial production of biotechnological drugs and increased employment in production, research and development. Of other investments he cited expansion of Pliva's capacities in Cracow, Poland and Brno, the Czech Republic, and accelerated investment in the Pliva Centre in Goa, India.
According to final data from the Central Depository Agency, Barr collected 17,056,977 Pliva shares, which account for 92 per cent Pliva's equity.
Under its offer of USD2.5 billion for the Croatian company, Barr will pay 820 kuna per share for all shares deposited during the bidding period. The transaction is expected to close by October 25.