Dr. Reddy's Laboratories has signed a definitive agreement to acquire BASF's pharmaceutical contract manufacturing business and related facility in Shreveport, Louisiana, USA for an undisclosed amount.

The deal is likely to be completed within the first quarter of fiscal year 2008-09, subject to customary closing conditions. The transaction will be funded using Dr. Reddy's internal cash reserves or other committed credit facilities, the Hyderabad-based company said in a press statement.

This business involves the contract manufacturing of generic prescription and over-the-counter products for branded and generic companies in the US. It recorded revenues of US $43 million for the year ended December 31, 2007.

Satish Reddy, managing director and chief operating officer, Dr. Reddy's Laboratories, said, "Dr. Reddy's is committed to building a leading Global Generics business over the next few years. And as we drive significant growth in our key markets, we will continue to expand our supply chain network into these markets to enable us to respond to local market needs as well as provide competitive solutions to our customers globally. The acquisition of BASF's finished dosage manufacturing facility in the US will enable us to strengthen our supply chain for North America and provide a strong platform for pursuing additional growth opportunities."

The acquisition will include the relevant business, customer contracts, related ANDAs and NDAs, trademarks, as well as the manufacturing facility and assets at Shreveport, Louisiana. It also includes a tolling and supply agreement. The facility is designed to manufacture solid, semi-solid and liquid dosage forms. It currently employs approximately150 people and has a proven track record of compliance with regulatory authorities including the US FDA.

Mark Hartman, president, North America Generics, Dr. Reddy's Laboratories, said, "We are excited about this acquisition as this facility provides us with a profitable revenue base built on strong customer relationships with branded and generic companies. It also provides us with an additional platform to further expand our portfolio of prescription generics, OTC capabilities and product portfolio and the ability to supply generic products to US government agencies."

"We are pleased with Dr. Reddy's decision to acquire BASF's contract manufacturing business and facility at Shreveport, Louisiana and are encouraged by Dr. Reddy's growth-oriented view of the business," said Martin Widmann, head of BASF's pharma ingredients and services global business unit.