Bergen Brunswig Bid Challenged by German Firm : Buyouts: Competition over acquisition of Europe’s largest drug distributor heats up as rival makes higher offer.

Bergen Brunswig Corp.’s plan to expand overseas appears in danger this week as a German rival upped the stakes in a bidding contest for Europe’s largest drug distributor.

Gehe AG of Germany outstripped by $55 million a $435-million bid offered in April by Bergen Brunswig and a French partner seeking to take control of the Continent’s largest drug distributor, the Office Commercial Pharmaceutique.

News that Bergen Brunswig, the second largest U.S. pharmaceuticals distributor, could facing a bidding war in Europe came just as the Orange-based company released financial results showing its third-quarter profits declined 16% from last year, although overall sales reached a record $1.76 billion.

Neil Dimick, Bergen Brunswig executive vice president, said the company would announce its next move by Friday, the deadline to respond to the counter bid.

Bergen Brunswig joined forces in April with Cooperation Pharmaceutique Francaise, France’s largest supplier of over-the-counter drugs, to bid $160 per share for the sprawling Office Commercial Pharmaceutique. Bergen Brunswig’s contribution to the proposed $435-million would be about $90 million.

Dimick said his company, which spent more than $500 million last year on acquisitions, would weigh the European expansion carefully. “We always have an interest in meaningful, strategically important acquisitions,” he said.

Company officials credited a $470-million acquisition last year of an Alabama competitor, Montgomery-based Durr-Fillauer Medical Inc., for higher quarterly sales, which were up nearly 32% from last year.

Net income for the third quarter fell to $14.45 million, equal to 40 cents per share, on revenue of $1.76 billion from continuing operations. This compares with a net profit of $17.2 million, or 44 cents a share, on revenue of $1.34 billion in fiscal 1992.

For the nine months ended May 31, Bergen Brunswig earned $39.2 million, or $1.05 per share, compared to net income of $43.1 million, or $1.08 per share, for the first nine months of last fiscal year.

Dimick cited increased competition and the growing emphasis on health care reform as adverse effects on the company’s profits.

Larger and more efficient distribution centers, such as one in Corona del Mar, contributed to improved operating earnings at the $6-billion company, Dimick said. Chairman Robert E. Martini also cited the new center in Houston, where 85% of all orders are filled by automation.

In Tuesday trading on the American Stock Exchange, Bergen Brunswig stock gained 12.5 cents a share to close at $17.875.

Bergen Brunswig Results

The company’s revenue for the latest nine months was up dramatically, largely because of the acquisition last fall of competitor Durr-Fillauer Medical Inc., but earnings are down. Here are figures for the nine months ended May 31:

9-month revenue in billions ‘93: 5.1

9-month profit in millions ‘93: 39.2

Sources: Bergen Brunswig, Bloomberg Business News