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<p><b>PLIVA, the largest pharmaceutical company in Central and Eastern Europe, 
  signed a non-binding Memorandum of Understanding with SANOFI BIOCOM PHARMA HOLDING 
  B.V.</b></p>
<p> Zagreb, 14 December 1998 </p>
<p>The Memorandum of Understanding deals with PLIVA's intention to purchase a 
  60% stake in the Polish pharmaceutical company FARMACOM whose head office is 
  situated in Krakow, Poland. According to the Memorandum of Understanding, the 
  purchase of the stake will be carried out through PLIVAs daughter company POLFA 
  Krakow which already owns the remaining 40% stake in FARMACOM. </p>
<p>The transaction will be conditional on (inter alia) obtaining the approval 
  of the Polish Office for market competition protection, which is expected in 
  the Spring of 1999. </p>
<p>FARMACOM produces, develops and markets a range of high quality drugs in all 
  forms - tablets, capsules and especially syrups. Production activities and the 
  position of FARMACOM in Krakow are ideally coupled with the existing needs and 
  capacities of PLIVAs Polish subsidiary POLFA Krakow for the production of liquid 
  drugs (syrups). </p>
<p>Commenting on this event Mr. Zeljko Covic, President of PLIVAs Management 
  Board, said: "This acquisition will be a further confirmation of PLIVAs strategy 
  to expand and grow on Central and Eastern European markets, thus additionally 
  strengthening its position as the leading pharmaceutical company from the region. 
  By purchasing a stake in FARMACOM, PLIVA will likewise widen the range of high 
  quality products in its portfolio as well as empower its position in one of 
  the fastest growing markets in the region". </p>
1	<p><b>PLIVA, the largest pharmaceutical company in Central and Eastern Europe,
2	signed a non-binding Memorandum of Understanding with SANOFI BIOCOM PHARMA HOLDING
3	B.V.</b></p>
4	<p> Zagreb, 14 December 1998 </p>
5	<p>The Memorandum of Understanding deals with PLIVA's intention to purchase a
6	60% stake in the Polish pharmaceutical company FARMACOM whose head office is
7	situated in Krakow, Poland. According to the Memorandum of Understanding, the
8	purchase of the stake will be carried out through PLIVAs daughter company POLFA
9	Krakow which already owns the remaining 40% stake in FARMACOM. </p>
10	<p>The transaction will be conditional on (inter alia) obtaining the approval
11	of the Polish Office for market competition protection, which is expected in
12	the Spring of 1999. </p>
13	<p>FARMACOM produces, develops and markets a range of high quality drugs in all
14	forms - tablets, capsules and especially syrups. Production activities and the
15	position of FARMACOM in Krakow are ideally coupled with the existing needs and
16	capacities of PLIVAs Polish subsidiary POLFA Krakow for the production of liquid
17	drugs (syrups). </p>
18	<p>Commenting on this event Mr. Zeljko Covic, President of PLIVAs Management
19	Board, said: "This acquisition will be a further confirmation of PLIVAs strategy
20	to expand and grow on Central and Eastern European markets, thus additionally
21	strengthening its position as the leading pharmaceutical company from the region.
22	By purchasing a stake in FARMACOM, PLIVA will likewise widen the range of high
23	quality products in its portfolio as well as empower its position in one of
24	the fastest growing markets in the region". </p>