Court orders Genefar to pay Richter $40 mln

Hungarian drugmaker Richter Gedeon on Tuesday said an arbitration court ordered peer Genefar to pay it $40 million in compensation for breach of contract in the failed acquisition of Polpharma.

Richter received the award of the International Court of Arbitration of the International Chamber of Commerce (ICC), dated August 3, 2011, on August 8. The company initiated the proceedings in December 2008.

With the award, the arbitration proceedings are closed and the Arbitration Tribunal dismissed the parties' further claims, including Genefar's counterclaim, Richter

Richter announced in November 2007 it would merge with Polpharma, the second-biggest player on Poland's drug market and its largest generics maker, to create the largest drug company in the region with a market capitalization of $5.35 billion. Richter said the transaction would take the form of a share swap, with Polpharma's owners getting a 25% stake in Richter after an issue of new shares.

On July 15, 2008, a day after the deal was scheduled to be closed, Richter said the transaction had not taken place.

A week before, the company had said the acquisition was "unlikely" after Polpharma owner Genefar made demands outside of the original agreement approved by Richter shareholders