French pharmaceuticals company, Sanofi-Aventis SA has won the approval of the board of Czech generic drug maker Zentiva NV for its takeover offer after raising its bid to about €1.8 billion ($2.6 billion).

PPF, the Czech financial group, made a bid in May for 950 crowns a share for Zentiva in which it is the second largest shareholder by virtue of it owning a 20 per cent stake.

Sanofi-Aventis, which has a 24.9-per cent stake of Zentiva, countered the offer by offering 1,050 crown per share which was rejected by the board of Zentiva saying it did not reflect the future growth potential of the company.

Sanofi closed the deal by raising its offer to CZK 1,150 per share, a premium of approx 6 per cent to Zentiva's closing share price of 1,085 crowns on Friday.

After battling for four months, a relieved Jiri Michal, Zentiva's chief executive said in a statement, "We believe that the improved offer represents attractive value for Zentiva's shareholders, particularly in light of the current market turbulence.

As agreed in the deal, Michal will remain as CEO of Zentiva and would submit his 3.4 per cent stake and voting rights on an undiluted basis, along with other members of Zentiva's management holding 2.3 per cent in the company.

The bid is conditional to Sanofi gaining more than 50 per cent of control over Zentiva, along with the necessary clearance. Sanofi has already got the approval in Russia and Ukraine, and is awaiting clearance from the European Union and Turkey.

Sanofi-Aventis had bought its stake in Zentiva in 2006 making its first acquisition since the French company was formed out of the August 2004 takeover of Aventis by rival Sanofi-Synthelabo.

In March 2008, it agreed to buy a majority stake in the generic drug business of Turkey's Eczacibasi for €460 million ($729 million).

Zentiva makes and sells generic drugs in Central and Eastern Europe, including products for pain, cardiovascular diseases and disorders of the central nervous system.

As part of its growth strategy, Sanofi-Aventis is 1expanding its presence into emerging markets that are characterised by high growth, low and medium disposable income and affordable pharmaceutical products, the group said in a statement Monday.

Sanofi-Aventis Europe and Zentiva have agreed that for the foreseeable future Zentiva will conduct its business under the brand names of Zentiva, whether alone or in association with Sanofi-Aventis brand names, and that its Prague headquarters will continue to be the centre of expertise for Zentiva's development, manufacturing, supply chain and marketing activities in affordable medicines in the CEE regions.

The acquisition is the most recent case of consolidation in the generic drug industry. Teva Pharmaceuticals is buying Barr Pharmaceuticals, and Daichi Sankyo has acquired Ranbaxy Laboratories.