- US$2.3 billion unconditional proposal brings immediate value to shareholders-

- Option agreements and direct ownership secures over 20% of outstanding PLIVA shares for Actavis -

Actavis Group (ICEX: ACT), the international generic pharmaceuticals company, notes Tuesday's announcement from PLIVA (LSE: PLVD; ZSE: PLVA-R-A) recommending a HRK 705 per share proposal from Barr Pharmaceuticals Inc. (NYSE: BRL). Actavis announces that it submitted an improved proposal to PLIVA and its financial advisers on Monday 26 June and now confirms the terms of that proposal today.

Under the terms of Actavis' improved proposal, PLIVA shareholders will receive HRK 723 per share in cash, in addition to the HRK 12 per share dividend as requested by PLIVA d.d, representing a total cash payment of HRK 735 per share, which corresponds to a value of US$2.3 billion. The financing required for this improved proposal is fully committed and will be arranged by JP Morgan, HSBC and UBS. The financing will consist of a mixture of loan facilities and a preferred security.

The decision to increase the offer price follows Actavis' due diligence review which identified greater potential synergies than previously anticipated. Actavis is convinced that its improved proposal represents a superior alternative for PLIVA's shareholders and other stakeholders:

* The merger would create the third largest generics company in the world with the critical mass and global reach to compete with the largest industry players. * Unlike the current proposal from Barr Pharmaceuticals Inc., Actavis' proposal is not conditional upon prior completion of regulatory reviews in the US, Germany, or other jurisdictions, and will bring immediate value to shareholders. * Unlike any other strategic partner, Actavis would be able to utilize its strong pipeline of over 300 products and market position in Europe to generate significant growth synergies. The enlarged Group would have one of the strongest pipelines in the industry. * Actavis intends to retain the PLIVA name in Croatia and to transfer production to Croatia from existing sites in various countries, enhancing its low cost manufacturing capabilities and creating more opportunities for management and employees in Croatia. Actavis also intends to enhance the research and development capabilities of PLIVA in Croatia and make use of PLIVA's current infrastructure to manage a large and important part of the business of the new Group. Actavis is therefore committed to create more opportunities for management and employees in Croatia. * The combined businesses will have a broad product offering both in the US and Europe, including biogenerics as well as injectable generic products. * Actavis will seek a stock listing in Zagreb to encourage ongoing support from the investment community in Croatia. * Actavis has an unrivalled track record in the generics industry in integrating large businesses quickly and with a high degree of success. Actavis has integrated over 20 acquisitions in the last 7 years. * The enlarged Group is expected to have combined revenue of EUR2.2 billion in 2006 and an EBITDA margin of approximately 23% in the first full year. Actavis expects to reach EUR50 million in synergies in 2007, EUR100 million in 2008 and thereafter. These synergies do not include the cost savings already planned by PLIVA to be achieved through product transfers. The acquisition is expected to have neutral impact on earnings in 2007, positive in 2008 and be strongly accretive to earnings in 2009.

Actavis announces that in the course of yesterday and today it acquired 1,505,943 ordinary shares and 371,865 GDRs of PLIVA representing 9.0% of the outstanding shares of PLIVA. At that time Actavis and parties acting in concert with it already controlled 0.7% of PLIVA's outstanding shares which were acquired by Quaestus Private Equity Partners earlier this year. This combines to a current ownership of 9.7% of the outstanding shares of PLIVA.

Actavis also announces today that it has entered into call option agreements over additional GDRs equivalent to 1,894,650 PLIVA shares representing 10.7% of PLIVA's outstanding share capital. The option agreements, and direct and indirect ownership thus secure 20.4% of outstanding PLIVA shares for Actavis.

Commenting on today's announcement, Robert Wessman, CEO of Actavis, said: "Our improved proposal follows a period of due diligence from which we have established that the synergies we can generate by combining these two businesses are greater than we had originally anticipated. This improved and unconditional proposal clearly represents both superior value and certainty of execution for PLIVA's shareholders. We look forward to receiving a positive response from PLIVA's Supervisory Board and presenting a public offer for PLIVA's shareholders."

Enquiries:

Actavis Group Halldor Kristmannsson Vice President of Corporate Communications +354 840 3425 Email: [email protected]

Financial Dynamics David Yates (London) +44 207 269 7156 Charles Armitstead (New York) +1 917 496 3840

Edelman Nick Barron +44 207 344 1561

About Actavis Group Actavis Group is one of the world's leading generic pharmaceutical companies, with operations in 32 countries and over 10,000 employees. Founded in 1956, the Group specializes in the development, manufacture and sale of generic pharmaceuticals. Actavis is headquartered in Iceland, with development and manufacturing facilities in three continents. Actavis has an impressive acquisition track record and has done over 25 acquisitions and has placed Actavis among the five largest generic pharmaceuticals company in the world, with over 650 products on the market and 300 products in development and registrations.

Forward looking statement Information in this press release may contain forward-looking statements with respect to the financial condition, results of operations and businesses of Actavis. By their nature, forward-looking statements and forecasts involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from that expressed or implied by these forward-looking statements. These factors include, among other things, exchange rate fluctuations, the risk that research and development will not yield new products that achieve commercial success, the impact of competition, price controls and price reductions, the risk of loss or expiration of patents or trade marks, difficulties of obtaining and maintaining governmental approvals for products, the risk of substantial product liability claims and exposure to environmental liability.