India's Sun Pharmaceutical Industries is expanding its presence in the USA by acquiring the narcotic raw material importer Chattem Chemicals.

Chattem operates a facility at Chattanooga, Tennessee, where it manufactures active pharmaceutical ingredients, with a focus on controlled substances. Terms of the deal were not disclosed but its sales for the year ended June are estimated at $26 million.

This is Sun 's third acquisition of a controlled substance business, having bought a facility in Hungary in 2005 and a brand new manufacturing site in New Jersey, which is equipped with special suites to make finished dosages. Dilip Shanghvi, chairman of the Mumbai-headquartered group, said that the latest acquisition “reflects our strategic resolve to be a more active player in the pain management segment in the USA".

Sun is currently embroiled in a battle to acquire Israel’s Taro Pharmaceuticals. The dispute between the two firms has been growing ever since May when Taro pulled out of the $454-million merger agreement with Sun. A year before, the latter’s $7.75 per share offer had been accepted but attempts to conclude the deal failed. Sun later upped its offer to $10.25 but Taro’s board said that was also “financially inadequate” so the Indian firm came back with a hostile bid, at the original $7.75 per share.