Aurobindo Pharma said it will acquire money-losing commercial operations in seven Western European countries from Actavis for a price expected to be “around €30 million” ($40.7 million), in a deal the buyer said will complement its existing European operations and can eventually regain profitability.

Aurobindo will acquire operations that include personnel, commercial infrastructure, products, marketing authorizations, and dossier licenses in Belgium, France, Germany, Italy, the Netherlands, Portugal, and Spain.

The deal, according to Aurobindo, accelerates its earlier-announced strategy of pursuing growth in European and international operations, in order to catapult the company into a top-10 position in key Western European generics markets.

Headquartered in Hyderabad, India, Aurobindo has steadily grown in Europe since acquiring Milpharm in the United Kingdom in 2006, followed a year later by Netherlands-based Pharmacin. Since then, the company has launched operations in countries that include Italy, Spain, Portugal, Romania, Malta, and Germany, using an advanced release lab and captive warehouse in Malta that serves as a logistics center for its European operations.

The company also said the deal will also provide it with a ready-made hospital sales infrastructure through which the company can launch its own injectable and speciality portfolio across Western Europe.

Aurobindo management estimated that net sales for the acquired businesses were “around €320 million” (about $434 million) in 2013, growing 10% year-over-year. Although these businesses are currently operating at a loss, “Aurobindo expects them to return to profitability in combination with its vertically integrated platform and existing commercial infrastructure,” the company said in a statement.

Actavis and Aurobindo will enter into a long-term commercial and supply arrangement in order to support the operations’ ongoing growth. The deal expands Aurobindo’s front-end operations into five segments (generics, prescription products, over-the-counter products, hospital products, and generics tenders) with about 1,200 products, and an additional pipeline of over 200 products.

The deal is subject to antitrust approvals and completion of employee consultation processes. No closing date was furnished in announcements of the deal.

“This transaction will complement our strategy of pursuing organic growth along with value-creating acquisitions within our served markets and adding complimentary growth platforms to provide scale and revenue diversity,” said V. Muralidharan, Aurobindo’s svp of European operations.

Sigurdur Oli Olafsson, president of Actavis Pharma, added that the deal “will permit Actavis to focus management time and resources to support accelerated investment in driving faster growth of other markets, including Central and Eastern Europe and Southeast Asia.”

Western Europe is the second global region from which Actavis has signaled plans to retreat in recent days. Last week, Actavis CEO Paul Bisaro said his company planned to exit China, telling Bloomberg in an interview: “It is not a business-friendly environment. If we’re going to allocate capital, we’re going to do so where we can get the most amount of return for the least amount of risk. And China is just too risky.”

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