UPDATE 2-Zentiva accepts higher Sanofi takeover offer

                                
 (Adds further detail, background)
                                
 PARIS/PRAGUE, Sept 22 (Reuters) - Czech generic drugs maker
Zentiva <ZNTVsp.PR> has accepted a higher takeover offer from
French drugmaker Sanofi-Aventis <SASY.PA> that values Zentiva at
around 1.8 billion euros ($2.6 billion), Sanofi said on Monday.
                                
 Sanofi said it had raised its offer to 1,150 Czech crowns
($69.32) per share. This represents a premium of around 6
percent to Zentiva's closing share price of 1,085 crowns on
Friday. 
                                
 Zentiva had rejected an earlier 1,050 crown per share bid by
Sanofi, saying it failed to reflect the company's future growth
potential.
                                
 "We believe that the improved offer represents attractive
value for Zentiva's shareholders particularly in light of the
current market turbulence," Zentiva's chief executive Jiri
Michal said in a statement.
                                
 Michal also said he would tender his 3.4 percent stake in
the company, along with other company managers holding 2.3
percent. As part of the offer, Michal would stay on as Zentiva's
CEO.
                                
 Zentiva had been at the centre of competing takeover bids
since May, when the drugmaker's second largest shareholder,
Czech financial group PPF, said it would bid 950 crowns per
share.
                                
 The move prompted Sanofi, the largest shareholder with a
24.9 percent stake, to launch its own 1,050 crown a share bid in
July.
                                
 Zentiva said the latest bid represents a 25.5 percent
premium over its closing price of 916.6 crowns on April 30, the
last trading day before PPF announced its bid intention.
                                
 The bid is conditional on gaining more than 50 percent of
control over Zentiva, along with competition clearance. Sanofi
has already won approval in Russia and Ukraine, and is awaiting
clearance from the European Union and Turkey.
                                
 Zentiva, which produces generic copies of branded drugs,
operates in central and eastern Europe, with the Czech Republic,
Romania and Turkey among its largest markets.
                                
 Sanofi's planned acquisition of Zentiva takes it deeper into
the field of generic drug production, an area which has
previously been shunned by large pharmaceutical companies but is
now receiving increased interest as a way to tap booming
emerging markets.
                                
 Zentiva had said it was seeking a partner to boost its
presence in target markets and that in the next two to three
years it could be taken over by a bigger peer.
                                
 Zentiva shares added 11.6 percent from the beginning of the
year, outperforming Prague's main PX <.PX> index, which dropped
27.5 percent. The company trades at 21.8 times this year's
forecast earnings, versus a European sector average of 22.9,
according to Reuters data.
                                
 Sanofi trades at 8.94 times this year's forecast earnings.
Its shares closed at 47.56 euros on Friday, giving the company a
market capitalisation of around 62.5 billion euros. Sanofi
shares have fallen around 24 percent since the start of the
year, in line with a similar decline in France's benchmark
CAC-40 index <.FCHI>.
 (Reporting by Sudip Kar-Gupta in Paris, Jason Hovet and Jana
Mlcochova in Prague; Editing by Quentin Bryar, Paul Bolding)