Abbott is India's biggest pharma firm after $3.7-bn Piramal deal

Abbott Laboratories has acquired Piramal's Healthcare Solutions's domestic business for an up-front payment of $2.12 billion with another $400 million annually for the next four years beginning 2011, taking the cost of the acquisition to $3.72 billion.

Abbott plans to fund the transaction with its own cash reserves and said that this deal will not impact its ongoing earnings per share guidance in 2010.

The acquisition comes two days after the Mumbai-based branded generics drugmaker denied market rumours that it is a target for takeover.

Under the deal Piramal Healthcare has agreed not to manufacture and sell generics in India or emerging markets for eight years, starting from the second half of 2010.

The acquisition will catapult the Abbott Park, Illinois-based drug maker with 2009 revenues of $31 billion, to the largest pharmaceutical company in India.

After the completion of the acquisition, Piramal's healthcare solutions business will become part of Abbott's newly created, stand-alone established products division, which will focus on expanding the global markets for its leading branded generics portfolio.