LONDON, England (CNN) -- Drugmaking giant GlaxoSmithKline (GSK) has agreed to buy independent U.S. skincare specialist Stiefel Laboratories for up to $3.6 billion.
The new business will operate under the Stiefel identity within the GSK Group.
In a statement Monday, the two companies said the deal would create a new world-leading specialist dermatology business with combined revenues of $1.5 billion.
Under the terms of the agreement GSK will acquire the total share capital of Stiefel for $2.9 billion. GSK also expects to assume $400 million of net debt upon closing. A further $300 million cash payment will be made depending on future performance.
GSK's existing prescription dermatological products will be combined with Stiefel's and the new specialist global business will operate under the Stiefel identity within the GSK Group.
The new business will have a broad portfolio of dermatology products including Stiefel's leading brands: Duac, for acne, Olux E for dermatitis and Soriatane for the treatment of severe psoriasis. GSK's key dermatology brands include: Bactroban, Cutivate and the recently launched Altabax.
Stiefel, part-owned by buyout firm Blackstone Group, is the world's largest independent dermatology company, with a range of prescription and over-the-counter products. According to Reuters.com it was put up for sale a month ago and attracted interest from a number of large pharmaceutical companies, including Novartis and Johnson & Johnson.
Following the announcement, GSK Chief Executive Andrew Witty said: "As part of our strategy to grow and diversify GSK's business, we are continuing to make new investments through targeted acquisitions. This transaction will create a new world-leading, specialist dermatology business and re-energize our existing dermatology products.
"The addition of Stiefel's broad portfolio will provide immediate new revenue flows to GSK with significant opportunities to enhance growth through leveraging our existing global commercial infrastructure and manufacturing capability. We look forward to working with Stiefel to develop this exciting opportunity."