Pliva is to buy a Spanish subsidiary from Novartis' generics division Sandoz. The Croatian firm will pay 21.5 million euros for Uso Racional (UR), a well known and established generic brand in Spain with expected sales of 12 million euros for 2006.

A Pliva spokesman said: "The acquisition of UR represents a strong strategic fit with Pliva's current Spanish operations, which Pliva expects to help it significantly strengthen its position and performance on this market." The move comes as Pliva leaves the proprietary focussing solely on the generics following GlaxoSmithKline's purchase of its Croatian research and development institute for $50 million.

Pliva chief executive Zeljko Covic said: "We are pleased to have delivered upon our promise of exiting the proprietary segment in this relatively short period of time. "This will allow us to now fully focus on our generics business, which we believe will deliver greater value to our shareholders. We will continue to invest strongly into generics research and development."