Foooey. The generics business being sold by Merck KGaA must smell an awful lot like the finest Swiss cheese to Malvinder Singh.

Otherwise, the ceo of India’s Ranbaxy Laboratories wouldn’t have bid for the unit, which analysts are valuing at about $6 billion.

“The only way Ranbaxy can get into the global big league is through acquisitions and Merck’s generics (unit) is the best available property to attain that goal,” Dipak Acharya, who owns $27 million of Indian stocks, including Ranbaxy, at BOB Asset Management in Mumbai, tells Bloomberg News.

There will be competition, though. Iceland’s Actavis, Israel’s Teva Pharmaceuticals, Germany’s Stada and Novartis, which owns the Sandoz unit, are believed to be sniffing about. Another Indian company, Dr. Reddy’s Laboratories, backed out, because it wasn’t…drum roll…ready.

“Generics are hot and I foresee a lot of bidding behind closed doors,” said Holger Geissler, who manages the equivalent of $1.9 billion in pharmaceutical stocks at DWS in Frankfurt.

Who will win? How much will they pay? Which company gets snapped up next? And how much longer will big pharma (those that don’t have a generics unit) sit on the sidelines while their pipelines run dry and unproven biotechs get too rich?
[tags]Generics, Merck KGaA, Ranbaxy[/tags]