US-based generic pharmaceutical firm Watson Pharmaceuticals is in talks to acquire Switzerland-based Actavis, according to reports.

The reports, published in the Financial Times, cite sources familiar with the matter that suggest the deal could be valued at around $4.5bn.

If successful, the acquisition would see Watson almost double its size and directly compete with other major generic drug manufacturers, such as Teva and Novartis.

Actavis is currently 78% owned by Thor Björgolfsson, with the remaining equity held by Icelandic banks and Actavis management, and any acquisition deal is likely to see Deutsche Bank reimbursed for a €3bn loan used by Björgolfsson when taking the company private in 2007.

Sources have suggested that talks between the two parties have been ongoing for four months, and a deal could be concluded within the next three to five weeks.

Watson chief executive Paul Bisaro has previously suggested that the company could be about to hit the acquisition trail as it looks to expand overseas.

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By GlobalData

"I think we’re probably a large transaction, one or two large transactions away on the generic side, where we’d like to increase our international capacity," Bisaro said in January.