So patient, the Germans

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The Independent Online
So patient, the Germans

THE CONCEPT of hostile takeover bids is pretty alien to German companies. The Germans prefer real engineering to the financial variety. They are unused to the cut and thrust of a full-scale bid battle. Yet Gehe, the German drugs wholesaler, has run rings round its British bid target AAH.

It pounced in February, just weeks after AAH's third profits warning in nine months. The most loyal AAH shareholder could be forgiven for losing patience as AAH confessed that its foray into street cleaning was losing money and that thieves had made off with £3m of its cheques. This was on top of a continuing disappointing performance in the core business of distributing pharmaceuticals. Compared with its biggest rival, Unichem, AAH looked pedestrian.

Gehe might well have got the necessary 50 per cent acceptances even without lifting its offer last week. But the revised bid of £400m makes AAH's chances of continuing independence decidedly slim. Only the arrival of a counter-bidder looks likely to stymie Gehe's plans. Two US firms, Bergen Brunswig and McKesson, have been mooted as potential white knights.

Dieter Kammerer, Gehe's chairman, scoffs at such a notion. He told me last week the chance of a white knight was "a desperate hope". Mr Kammerer has a far-sighted vision for Gehe. He wants to build it into a giant serving every major economy in Europe. The acquisition of OCP in France in 1993 gives him a dominant position there. He is strong in Belgium and already has toeholds in Italy, Portugal, Russia and Poland.

The extraordinary aspect of this pan-European dream is that, as Mr Kammerer himself admits, drugs wholesaling will be one of the last industries to benefit from the scale economies of a harmonised European market. Drugs distribution is the most national of industries. But Mr Kammerer believes that in 15 years there will be harmonisation among EU member states and his strategy will bear fruit.

It would be inconceivable for a British company to base a takeover bid on potential rewards 15 years hence.Truly the Germans do things differently.

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