After a month of speculation, GlaxoSmithKline has confirmed that it has agreed to buy the USA’s Stiefel Laboratories, the world’s largest independent dermatology company.

Under the terms of the deal, GSK is initially forking out $2.9 billion for Stiefel, a private company which is partly owned by asset manager The Blackstone Group. The UK drugs major will also assume $400 million of net debt upon closing (in the third quarter) and could also make a further $300 million cash payment, “contingent on future performance”.

Andrew Witty, GSK’s chief executive, said that the deal is part of the firm’s desire to grow and diversify its business through targeted acquisitions. This transaction “will create a new world-leading, specialist dermatology business and re-energise our existing dermatology products”, he added.

He went on to note that the addition of Stiefel’s portfolio “will provide immediate new revenue flows to GSK with significant opportunities” to enhance growth through “leveraging our existing global commercial infrastructure and manufacturing capability”. Its products include Duac (benzoyl peroxide/clindamycin) for acne, Olux E (clobetasol) for dermatitis and Soriatane (acitretin) for the treatment of severe psoriasis.

GSK’s key dermatology brands include the antibiotic Bactroban (mupirocin) for skin infections such as impetigo, Cutivate (fluticasone) and recently-launched Altabax (retapamulin). Combinerd revenues of the firms’ dermatology businesses last year was approximately $1.5 billion, representing an 8% share of the market, and Stiefel sales make up $900 million of that total.

Stiefel also has 15 projects in late-stage development “across a wide variety of dermatological conditions” and has access to “significant innovative and proprietary formulation technologies”. Its chief executive Charles Stiefel will lead the new business.

GSK said it expects annual pre-tax cost savings of up to $240 million by 2012, with integration costs of $325 million over the next three years. Excluding the latter expense, the transaction will dilute the firm’s earnings per share by less than 1% this year and be 1%-2% accretive to EPS in 2010.