(Reuters) – Sun Pharmaceutical Industries Ltd, India’s largest drugmaker by sales, said on Tuesday it has agreed to buy GlaxoSmithKline’s opiates business in Australia to strengthen its pain management portfolio.
The business consists of analgesics made from raw materials found in opium poppy plants, and includes two manufacturing sites in the states of Tasmania and Victoria.
Financial details of the deal were not disclosed. A Sun Pharma spokesman declined to comment. Glaxo did not immediately respond to a request seeking comment.
Glaxo supplies a quarter of the world’s medicinal opiate needs from poppies grown by farmers in Tasmania, according to the company website. The company’s Australian opiates business brought in revenue of A$89 million ($69.63 million) in 2013.
Australia’s poppy industry is the world’s largest legal supplier of pharmaceutical grade opiates for painkillers, and Glaxo is one of three firms that control the crop and production in Tasmania.
The other two are Johnson & Johnson’s unit Tasmanian Alkaloids, and privately-held TPI Enterprises.
Glaxo’s decision to part with the opiates business comes as Tasmania’s poppy industry is facing a tough crop and the United Nations is expected to cut the state’s poppy crop area this week.
Glaxo said the deal would allow it to “focus on delivering its innovative product portfolio” in Australia.
“The opiates business has been an important part of our Australian business for many years, but as our portfolio transitions, we believe now is the right time to hand this business over to someone else,” Steve Morris, general manager of GSK Opiates, said in a statement.
The business employs 185 staff, including 155 in Victoria state and 30 in Tasmania state. Sun Pharma said it would hire all employees from both sites.
“The acquisition is a part of our strategy towards building our portfolio of opiates and accessing strong capabilities in this segment,” said Iftach Seri, executive vice president of the active pharmaceuticals ingredients business at Sun Pharma.
Both companies said they expect to close the deal by August.
Sun Pharma shares closed 1.93 percent higher on Tuesday, while the broader Nifty rose 0.44 percent.
($1 = 1.2781 Australian dollars)
(Reporting by Zeba Siddiqui in Mumbai and Byron Kaye in Sydney; Editing by Sunil Nair and Kavita Chandran)