February 24, 2006

Indian generic drug manufacturer Dr. Reddy's Laboratories has signed a deal to acquire Germany's Betapharm Arzeniemittel GmbH for roughly $570 million.

The definitive agreement puts an end to an acquisition bid by larger rival Indian firm Ranbaxy, which reportedly was set to pay $500 million for Betapharm.

Betapharm is the fourth-largest generic company in Germany, with roughly 370 employees and a current portfolio of about 145 products. The combined company could emerge as a leading generics player in Europe, the firms said.

"We see our investment in Betapharm as a key strategic initiative towards becoming a midsized global pharmaceutical company with a strong presence in all key pharmaceutical markets," said Anji Reddy, chairman of Dr. Reddy's.

"Dr. Reddy's impressive pipeline of generic and innovative products, and its high quality standards combined with competitive manufacturing infrastructure, will help further develop our position in the German market and offer an entry platform for the European market," said Wolfgang Niedermaier, CEO of Betapharm.

The transaction is subject to closing conditions and is expected to close in the first week of March. In November 2005, Dr. Reddy's signed a deal to purchase Roche's active pharmaceutical ingredient business in Mexico for $59 million.