As it moves to boost its presence in emerging markets, healthcare group Abbott Laboratories has announced a $3.7 billion buyout of the generic drugs unit of India's Piramal Healthcare.
Abbott said the deal would make it the leading pharma company in India with a market share of 7%.
Abbott said the deal would accelerate its growth in emerging markets "giving it the number one position in the Indian pharmaceutical market". Abbott said India's pharmaceutical market is likely to generate $8 billion in annual sales in 2010 and more than double by 2015.
The deal means that Piramal Healthcare now retains just under 50% of its business, which includes critical care and anesthetics, diagnostic and clinical research services and life sciences business.
"The Abbott-Piramal deal reflects the growing global importance of generics and the rise of India's consumer market for drugs," said Tarun Shah, chief executive of Mehta Partners, a biopharmaceutical investment research and strategic advisory firm.
Pharmaceutical sector analysts called the deal a "benchmark", which could see more Indian firms selling out businesses to multinationals who are keen to expand in one of the world's fastest-growing markets.
India's pharma sector is growing at between 12% to 15% each year, compared to about 3% percent for Western countries. Low production costs and skilled scientific talent make Indian acquisitions particularly attractive.
Abbott recently acquired Belgium's Solvay Pharmaceuticals and has a collaboration with local firm Cadila Healthcare to supply generic drugs.
In 2008, India's biggest generic drug maker Ranbaxy sold a majority 64% stake in the firm to Japan's Daiichi Sankyo.
Five of India's top 10 drug companies are multinationals, which include players like Pfizer and GlaxoSmithKline.
Copyright Agence France-Presse, 2010