NALE Laboratories, a company set up in 1994 by Elan Corporation and a number of American institutional investors, is to acquire Warner Lambert's generic pharmaceutical business, Warner Chilcott, in the US. . It had sales last year of $125 million.

No details of the consideration have been disclosed by either Nale or Warner Lambert, but Warner Lambert has entered into manufacturing and service agreements with Nale and will have rights to become a minority shareholder in Nale.

The size of the minority stake has also not been disclosed, but is understood to be linked to Warner Chilcott's performance under its new ownership.

Elan is currently the biggest shareholder in Nale with a stake of just over 25 per cent and the main institutional investors are Dominion Income & Management, American International Group and Halisol. Other share holdings are held by a number of private investors.

Established in 1987, Warner Chilcott is a market leader in the American generic drugs market.