Israel’s Teva Pharmaceuticals, the world’s largest generics maker, plans to invest over $1 billion in India over the next two years to acquire Indian drug companies and set up manufacturing facilities, The Business Standard reports.

Around $250 million to $300 million will be used to establish manufacturing facilities and the rest to fund acquisitions in India. A few weeks ago, Teva had acquired over 100 acres of land near Gwalior, Madhya Pradesh, to set up API manufacturing facilities that will match the production capacity of domestic generic majors such as Ranbaxy, Cipla, Dr Reddy’s, Sun Pharma and Wockhardt, sources told the paper. Work would start at the site after government clearance is obtained.

“Teva considers India an interesting geographical region and is looking to broaden its activities in the country,” Shir Altay, a company spokesperson wrote in an e-mail.

Teva is also likely to integrate Regent Drugs, which it acquired from JK Industries in 2003, with its API business. Regent Drugs, now a 100 per cent subsidiary of Teva, manufactures some APIs that Teva requires for its global business. The company also sources APIs from many Indian companies. V K Batra, managing director, Regent Drugs, declined comment. Teva has an Indian arm, Teva India, and a research and development centre in New Delhi which it started a couple of years ago.

Merchant banking sources say Teva has been aiming at a major acquisition in India for the past three years, but no deal has been struck yet, perhaps due to high valuations. Targets include such drug majors as Cipla, Aurobindo, Matrix and Orchid, as well as Saraca Laboratories of Hyderabad.