Consumer goods firm Reckitt Benckiser has agreed to buy privately-held Indian company Paras Pharmaceuticals for about $726m (£460m), to boost its operations in a fast-growing healthcare market.
Big global healthcare firms are fast driving into emerging markets as sales stall in developed countries and as they look to tap into the healthcare needs of billions of new consumers in places such as China, India, Brazil and Russia.
Paras, which clocked sales of more than four billion rupees in the financial year ended March, makes several over-the-counter medications, including Moov pain relief ointment, Krack heel care lotion, and D'Cold cold remedy.
"The research base of companies and the market potential in India are the main attractions for foreign players in the Indian healthcare sector," said R.K. Gupta, managing director at Taurus Asset Management Company in New Delhi.
"We will see these kind of deals in the future as well as global drug makers step up their efforts to capture a bigger share of the emerging markets."
Private equity firm Actis will sell its 63 per cent stake in Paras to Reckitt Benckiser. Other shareholders including Sequoia Capital and Paras founder Girish Patel and his family will also sell their stakes to the company.
"It creates a material healthcare business in India, one of the most promising healthcare markets in the world with the addition of number of strong and leading brands," Reckitt Chief Executive Bart Becht said in a statement.
Reckitt has in its stable a number of household names including cleaner Cillit Bang.
City A.M. Reporter