TOKYO Japan's Sawai Pharmaceutical Co Ltd (4555.T) is buying the generic drug business of U.S. drug maker Upsher-Smith Laboratories Inc for $1.05 billion, marking the Osaka-based generic drugmaker's first overseas acquisition.
Sawai said on Thursday it is acquiring the business of the Minnesota-based company from the founding family to expand its presence in the United States, whose generic drug market it estimates at around 10 trillion yen ($91.87 billion), the world's largest.
Sawai's move to diversify geographically comes amid slow growth in Japan's overall generic drugs market. And though the Japanese government aims to boost usage of generic drugs, growth may not be commensurate as prices of generic drugs are typically cheaper than patented ones.
Japan's generic drug market currently is around a tenth of the U.S. market. It was worth 836.4 billion yen in 2016 and will grow to 1 trillion yen in 2020, according to research firm Fuji Keizai Co.
Sawai will use cash and bank loans for the acquisition.
The Japanese drugmaker plans to complete the deal by the end of June. The acquisition will not affect its earnings forecast for the year ended March, Sawai said.
(Reporting by Chris Gallagher and Junko Fujita; Editing by Muralikumar Anantharaman)