Watson Pharmaceuticals has acquired Ascent Pharmahealth, the Australian and southeast Asia generics business of India's Strides Arcolab for A$375 million (about $393 million) in cash.

The purchase will make Watson the fifth largest generics company in Australia and the second largest in terms of total molecules. It also becomes the biggest generics player in Singapore and gains an established commercial base in Malaysia, Hong Kong, Vietnam and Thailand.

Ascent sells branded and non-branded-generics, plus over-the-counter and dermatology and skin care products in Australia, where it has a 14% market share. It employs 300 employees in the latter and southeast Asia. and had sales of A$150 million in 2011.

Watson chief executive Paul Bisaro said the firm has been looking to expand into "geographies where we can capitalise on our existing assets and participate in growing and emerging markets". The acquisition "immediately establishes Watson among the leaders in the A$12 billion Australian pharmaceutical market", he said, where generics are growing at 8%, and complements its existing presence in the country.

Watson currently operates in Australian through its Spirit Pharmaceuticals and Willow Pharmaceuticals subsidiaries. During 2010, the company established the Watson Pharma Co to consolidate its position there.

The Ascent purchase "catapults us to a top five position that would have taken considerable time and investment to build organically", Mr Bisaro said. He added that "it also provides us with a leadership position in southeast Asia, a region with more than 600 million consumers and overall annual generic sales of A$4 billion a year".

Arun Kumar, Strides Arcolab's chief executive, said the deal will help his firm "focus on our highly attractive steriles segment, which we expect to be our growth engine going forward". He added that the proceeds from the transaction "considerably strengthen our balance sheet".