Purchase of Piramal Healthcare’s subsidiary follows Abbott’s recent deal with Indian company Zydus Cadila.

Abbott aims to become India’s leading pharmaceutical company through the $3.72 billion cash acquisition of Mumbai-based Piramal Healthcare’s generics business. The deal includes a $2.12 billion up-front payment and four $400 million annual payments starting in 2011.

Piramal’s Healthcare Solutions business specializes in Indian branded generics. It is expected to make sales of over $500 million in India next year. The business experienced 23% growth in the fiscal year ending March 31, 2010.

Abbott says it will integrate the operation into its newly created, standalone Established Products division. The division was formally announced just last week, when Abbott also reported on a licensing and supply agreement with India’s Zydus Cadila for a portfolio of 24 pharmaceuticals, which it will commercialize in 15 emerging markets.

Piramal suggests that the combination of its branded generics business with Abbott’s existing operations means the latter will take the number one slot in India with a 7% market share. Abbott says that it hopes its combined Indian pharmaceuticals business will achieve growth of about 20% annually and potentially reach sales of over $2.5 billion by 2020.

“This strategic action will advance Abbott into the leading market position in India,” says Miles D. White, Abbott chairman and CEO. “Emerging markets represent one of the greatest opportunities in healthcare, not only in pharmaceuticals but across our business segments. Today emerging markets represent more than twenty percent of Abbott’s total business.”

The company claims branded generics account for some 25% of the global pharmaceutical market and corner the lion’s share of the largest emerging markets. They are also expected to overtake the growth of patented and generic products. Abbott suggests the branded generics market in India is a key factor in the country’s standing as one of the fastest-growing pharmaceutical markets worldwide. The country currently generates about $8 billion worth of pharmaceutical sales annually, a figure that is expected to double by 2015.

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