US-based Watson Pharmaceuticals Inc said it bought the Australian and South East Asian generic drugs business of India's Strides Arcolab for A$375 million ($396 million), boosting Strides' shares by more than 18%.
Watson said on Tuesday it acquired 94% of Ascent Pharmahealth Ltd from Strides and the rest from the Australian company's chief executive, Dennis Bastas.
Watson said the deal made it the fifth largest generic pharmaceutical company in Australia in terms of revenue, as well as the largest generic drugmaker in Singapore.
The US company said it had also gained an established commercial base in Malaysia, Hong Kong, Vietnam and Thailand.
For Bangalore-based Strides, the sale of will help it cut debt by $250 million and lower its debt-to-equity ratio to 0.6-0.7 from about 1.6, group chief executive Arun Kumar said.
"Post the sale, we will continue to focus on injectables and specialty businesses," Kumar told CNBC-TV18.
Strides raised its stake in Ascent Pharmahealth to 94% last April, and had valued the company at A$100 million.
"The sale of Ascent is a forward-looking initiative for Strides," Kumar said in a statement.
"We have been clear about our intention to focus on our highly attractive sterile segment, which we expect to be our growth engine going forward," he said.
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