Takeda Pharmaceutical, the biggest Japanese drug maker, plans to spend about $5 billion to buy out Abbott Laboratories in their 50-50 US venture, according to sources.

The deal for TAP Pharmaceutical Products, which would strengthen Takeda's US sales operations, would be the biggest overseas acquisition by a Japanese drug firm and follow Eisai Co.'s purchase of the cancer specialist MGI Pharma this year for $3.9 billion.

With the drug market in Japan showing little growth, the largest Japanese pharmaceutical firms are looking to increase their presence in the world's biggest drug market as well as replenish their pipelines.

Astellas Pharma recently bought US biotech firm Agensys, while Daiichi Sankyo has embarked on a major US expansion.

The person, who declined to be identified because the agreement had not yet been announced, said Takeda was in talks to make TAP a wholly owned unit at a cost of about ¥500 billion, or $5 billion, and aimed to complete the deal by the end of the year.

Takeda, which has earmarked $10 billion for major investments including acquisitions, has been trying to gain full control of TAP for a decade, but has been at odds with Abbott over the price.

"If they are paying $5 billion, it does sound a little expensive so it's not a deal to get all excited about, but it's good that they've finally got it out the way," said Kumi Miyauchi, an analysts at Daiwa Institute of Research. "Now they know how much they are paying, it frees them up more to pursue other deals."

TAP, whose main product is the heartburn drug Prevacid, had sales of about $1.5 billion in the April to September period last year.

The patent for Prevacid expires next year although TAP is seeking approval for a modified release version of the drug, which it hopes will fend off generic competition.

A Takeda spokesman, Seizo Masuda, said the drug maker had made no decision on buying TAP. Abbott declined to comment.

The Nikkei business daily said Takeda wanted to minimize the amount of cash it would need to spend on the acquisition by transferring TAP's prostate cancer treatment, Lupron, as well as the rights to some experimental medicines to Abbott.

Takeda plans to merge TAP with its wholly owned firm Takeda Pharmaceuticals North America, the newspaper reported.

Miyauchi said that with Prevacid's loss of patent protection coming up, it was important for Takeda to gain control of TAP before key sales staff started leaving the firm.