Generic-drug makers Teva and Actavis, backed by Swedish buyout firm EQT, have placed make-or-break bids for German peer Ratiopharm but drug major Pfizer is expected to also be a contender, sources said.

Ratiopharm could stay in takeover talks with two or even three bidders, as some bids, are seen within a close range of €3 billion, said the people, who are familiar with the procedure. That would make the deal the biggest generics takeover since Teva's $7.5 billion purchase of U.S. rival Barr, announced in July 2008.

The world's largest drug company Pfizer, previously seen as an unlikely candidate, has re-emerged, defying a relatively unfavorable impression it left with regional law-makers in southwestern Germany, where Ratiopharm is headquartered, according to the people. Industrial heir Ludwig Merckle is selling Ratiopharm as part of concessions made to creditor banks by his late father Adolf Merckle, who committed suicide in January 2009 after losing control over his business empire to lenders during the financial crisis.

Industry analysts said Teva, the world's largest generics company, has deeper pockets and stands to gain more from potential cost cuts at family-owned Ratiopharm than does Actavis/EQT. The Nordic consortium, however - which has enlisted former Ratiopharm Chief Executive Claudio Albrecht for advice - has improved its chances after pledging to protect jobs in the region.

"Teva seems to have a better financial position and the infrastructure to capture cost synergies. However, the smaller size of Actavis may appeal to the family-owned seller," analysts at Jefferies said in a note. "Also, an Actavis acquisition may be somewhat more job-friendly."

Pfizer has already struck a string of collaborations and acquisitions to bolster its range of generics, particularly off-patent injectable drugs. An alliance with India's Strides Arcolab Ltd last month marked the latest step.

For its part, Teva has said it plans to more than double total revenue and almost triple sales in Europe by 2015, a venture analysts say would require acquisitions worth $15 billion. Ratiopharm could become Teva's fast track to the No. 1 spot in Germany's generics market, the world's second-biggest, where Teva now trails Novartis, Ratiopharm, and Stada

The acquisition would also make Teva the largest generics player in Europe, where its presence has been below Teva's global average.

A spokesman for Ratiopharm declined to comment, as did spokespeople for Teva, Pfizer and EQT. Ratiopharm previously said a deal would be closed in the first quarter at the earliest.

Sources have said that debt-laden Actavis sought backing from EQT for the takeover bid in an aggressive move to boost the Icelandic firm's market value after it failed to find a new owner last April.