The Belgium chemicals and pharmaceuticals group Solvay is to buy France’s Fornier Pharma in a friendly deal.
The price is 1.3 billion euros in cash, with an additional 300 million euro payment based on performance.
Fournier’s specialty is heart medicines and drugs used to control cholesterol.
The two firms will combine their research and development efforts and Solvay says the acquisition will boost its sales by one third and will immediately improve profitability.
The Belgium company has been looking for some time to expand its pharmaceutical division, where sales fell last year.
Solvay is Belgium’s largest chemicals firm and that side of the business accounted for almost a third of its 7.9 billion euros turnover last year. But pharmaceuticals and specialist products produced around two thirds of its profits.
The whole Solvay group employs 30,000 people in 50 countries. Fournier, which is family owned, is France’s fifth largest drugmaker.
The deal is another example of how medium-sized European pharmaceutical companies are combining to compete against larger US rivals and to cope with increasing research and development costs.
Last year saw the merger of two of France’s biggest drugmakers, Sanofi and Aventis.