(Adds details, comment from Sandoz CEO)
ZURICH, Nov 11 (Reuters) - Novartis is buying the Japanese generics unit of South Africa's Aspen Pharmacare in a deal worth up to 400 million euros ($440.80 million) to expand in the world's third-biggest drug market, the Swiss drugmaker said on Monday.
Novartis's Sandoz generics business agreed to pay 300 million euros initially, plus a deferred amount not expected to exceed 100 million euros based on certain conditions being met, Novartis said. Completion of the transaction is expected in the first half of 2020.
Aspen Pharmacare has abandoned its dividend this year and is selling assets to pay down debt after levels moved close to breaching debt covenants.
Novartis's Sandoz is adding Aspen's Japan business in part to boost access to hospitals there. The South African's portfolio consists of 20 off-patent medicines with annual sales of 130 million euros, including anaesthetics like Xylocaine as well as speciality brands such as the immune suppressing drug Imuran used by some multiple sclerosis patients.
"The acquisition of Aspen's Japanese operations would significantly strengthen our position in this country, a stable but growing generics market," Sandoz Chief Executive Richard Saynor said in a statement.
Sandoz is in the midst of a reorganisation within Novartis, as Chief Executive Vas Narasimhan sells U.S. generic pills and dermatology assets that had come under price pressure while simultaneously boosting the autonomy of the remaining businesses in a move he said will help them better compete.
$1 = 0.9074 euros Reporting by John Miller; editing by Thomas Seythal