Indian drug maker Dr Reddy's has made its first overseas acquisition in a deal to buy two small British generic drug companies for �9m ($12.7m).

Dr Reddy's, India's only US-listed pharmaceutical company, said the acquisition of BMS Laboratories and its subsidiary Meridian Healthcare would be completed by early April.

Chief executive G V Prasad said the acquisition would "jumpstart" the company's generics business in the UK.

"This acquisition gives an entry for Dr Reddy into Europe, which it's been looking for for some time," Rusmik Oza, Mumbai-based brokerage Karvy Stock Broking told the BBC's World Business Report.

"It will be the platform for Dr Reddy to first increase sales in the UK and then in Europe."

British generics

The Hyderabad-based drug maker said the BMS group made solid and liquid medication and packaging.

In a statement it said Meridian currently sold 30 generic products and planned to get licences for another 70.

The BMS group made a profit of �1.6m on sales of �8million in 2001.

US market

Dr Reddy's main export market for its generic drugs is the US.

It has sold $60m worth of a generic copy of Eli Lilly's anti-depressant Prozac in the US.

Other Indian drug makers like Ranbaxy Laboratories, Wockhardt and Sun Pharmaceutical Industries have already made acquisitions in the US and Europe.