The transaction is expected to be completed in the first quarter of the current financial year. It will be funded via Dr Reddy's internal cash reserves and ‘other committed credit facilities', the company said in a statement.

The pharma business of BASF, the world's leading chemical manufacturer, involves contract manufacturing of generic prescriptions and over-the-counter products for branded and generic companies in the US. BASF's pharma business recorded revenues of $43 million (Rs 172 cr) for the year ended Dec 2007.

"The acquisition of BASF's finished dosage manufacturing facility will enable us to strengthen our supply chain in North America and provide a strong platform for pursuing additional growth opportunities," Satish Reddy, managing director and chief operating officer of Dr Reddy's, said.

The acquisition will include relevant business, customer contracts, related ANDAs (abbreviated new drug applications) and NDAs, trademarks, as well as the manufacturing facility and assets at Shreveport.

It also includes a tolling and supply agreement. The facility is designed to manufacture solid, semi-solid and liquid dosages. It currently employs approximately 150 people.

According to Mark Hartman, president of Dr Reddy's North America generics division, the acquisition provides the company an additional platform to further expand its portfolio of prescription generics, OTC capabilities and product portfolio and the ability to supply generic products to US government agencies.