Sweden’s Meda has agreed to buy a major part of the European operations run by the USA’s Valeant Pharmaceuticals and in return is shelling out $392 million in cash.

For its money, Meda is acquiring Valeant’s businesses in western and eastern Europe, though the deal excludes the California-based firm’s operations in Poland, Hungary, Slovakia and the Czech Republic. The sales of the acquired businesses stand at around 1.1 billion Swedish crowns (around $184 million) and give Meda a strong foothold in Germany, the UK, Italy, Spain and Russia. The businesses employ 380 people, 230 of which work in sales and marketing and the regional headquarters are in Basingstoke, UK.

The Valeant products that Meda will get access to include Mestinon, (pyridostigmine bromide) for the treatment of myasthenia gravis, a neuromuscular, autoimmune disorder which had 2007 sales of 210 million crowns, and Tasmar (tolcapone), used in combination with levodopa and carbidopa for severe Parkinson’s disease. Its revenues last year reached 40 million crowns. Another key product is Solcoseryl (haemodialysate), used for treating wounds, which had sales of 140 million crowns last year.

The Swedish firm’s chief executive Anders Lonner said the acquisition “has a perfect fit with our operations in Europe". He added that "we now get a foothold in Russia and we will use that platform to introduce many of our pipeline products”.

His counterpart at Valeant, Michael Pearson, said “our focus is the North American market and we believe that this transaction will enable Valeant to better focus on its key strategic markets and products.” He added that the firm is “still considering all options with respect to our central European operations”, which had combined revenues in 2007 of $120 million, saying that “this business continues to grow and has many market opportunities to expand from its strong regional base”.

Meda thinks the operations it has secured can expand too. It said that the Valeant businesses had a margin on earnings before interest, tax, depreciation and amortisation of 14% last year, but its ambition is to raise this to above 30%. The acquisition will be paid for initially through bank loans to be followed by a share issue which should raise 1.5 billion crowns.

Meda said integration would produce both one-off costs and synergy savings, but did not specify the amounts.