Indian firms seek acquisitions: overseas expansion is likely to accelerate.(pharmaceuticals & fine chemicals)

International mergers and acquisitions (M&A) by Indian producers of pharmaceuticals and pharmaceutical intermediates have been a feature of the pharma and fine chemical industry for almost 10 years. The trend began with Sun Pharma's (Mumbai) acquisition of Caraco Pharmaceutical Laboratories (Detroit) in 1997 and Wockhardt Ltd.'s (Mumbai) purchase of Wallis Laboratory (Luton, U.K.) in 1998. However, the trend is now picking up pace, industry watchers say. Indian pharma companies are building up funds for their next overseas purchases. Sun Pharma recently announced that it has built up a $450-million war chest for acquisitions, and that it is looking to buy into the U.S. generic drugs market.

There are several reasons why Indian firms are hitting the international acquisition trail, analysts say. "When a …