A source close to the development says the pharmaceutical firm has completed the first round of talks with the RPG group and its merchant banker Enam Securities recently. Wockhardt is the other serious contender of RPG Life Sciences.

The promoters hold a 50.3-per cent stake in RPG Life Sciences, while domestic financial institutions hold 15 per cent. The rest is held by the public and other corporate bodies. RPG Life Science has three plants located in Ankleshwar, Pune and Thane.

The company has also taken a part of Hindustan Antibiotics for the production of vitamin B varieties. As part of the RPG group's plan to exit from non-core businesses, the group had sold its agro-chemical business, Isagro SpA.

Currently, Ranbaxy is closing a deal to acquire the France-based RPG Aventis for about Rs 315 crore. The deal will give Ranbaxy a healthy share in Europe, one of the largest markets for Indian generic companies.

Europe is now the fastest-growing market for Ranbaxy though it currently accounts for less than 15 per cent of the company's global sales. In France, the generics market is estimated to grow to $1.37 billion by 2005 from the current $594.81 million. The French pharmaceutical market is the second largest in Europe.