The Czech central bank said that Sanofi-Aventis can go ahead with its improved bid for generic drugs producer Zentiva .Sanofi, which is Zentiva's largest shareholder with 24.9 percent, said on Sept. 22 that it had raised its offer for Zentiva to 1,150 Czech crowns per share from 1,050 crowns, valuing Zentiva at around 1.8 billion euros ($2.58 billion).

The bank's approval was needed in its role as supervisor of financial markets. The acquisition would take Sanofi deeper into the field of generic or unpatented medicines — an area previously shunned by large pharmaceutical companies but which is now receiving increased attention as a way to tap booming emerging markets.

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.

PPF said in a statement on Tuesday it had called for an extraordinary shareholders' meeting to discuss the improved Sanofi bid and Zentiva's management support for it.Zentiva said it would comment on the issue later. PPF, which jointly holds a stake in Zentiva with Italian insurer Generali withdrew its own bid for Zentiva in July after Sanofi counterbid. Seperately, PPF raised its stake in Zentiva to 21.59 percent from 19.23 percent, a regulatory filing with the Netherlands Authority for Financial Markets.