Indian drug maker Dr Reddy's is buying German-based rival Betapharm for 480m euros ($572m; £328m).
Dr Reddy's appears to beaten a rival Indian bid
Aiming to boost its presence in Europe, Dr Reddy's is buying Betapharm from its UK-owner, private equity group 3i.
Dr Reddy's chairman Anji Reddy described the deal was a key strategic move in the firm's expansion plans.
In buying Betapharm, Germany's fourth largest generic drugs firm, Dr Reddy's appears to have beaten off a challenge from Indian rival Ranbaxy.
Ranbaxy said earlier in the week that it had made a bid for a German drugs maker which it did not name.
"The investment will provide a strong foundation ... to build a significant generics business in Europe in the long-term," said GV Prasad, chief executive of Dr Reddy's.