Watson Pharmaceuticals Inc. is reported to be closing on the acquisition of Actavis for about $7 billion.

Going by the Reuters report, Watson will pay between 5.0 billion and 5.5 billion euros to Actavis. The acquisition of the Europe-based firm must be the largest this American pharmaceutical company has so far been involved in, for the current business of Actavis must be as big as that of Watson.

Bjorgolfur Thor Bjorgolfsson, the businessman from Iceland, had taken over the Swiss-based Actavis in 2007. He currently has 78 percent stake in the firm, which has an impressive market share in central and eastern Europe.

This strong presence of Actavis in specific emerging markets could be the major attraction for Watson to acquire it.

Watson has already been involved in a few other acquisitions which includes the 2006 purchase of Andrx Corp for $1.9 billion, the 2009 acquirement of Arrow Group for $1.75 billion and the 2011 takeover of Specifar Pharmaceuticals of Greece for $562 million.

It is also notable that Sigurdur Oli Olafsson, the former chief executive officer of Actavis, had left the firm to join Watson as head of global generics in September 2010.

Watson, whose sales for 2011 were $4.6 billion, has a market value of about $7.5 billion. Going by the data of IMS health, Watson is the fifth largest generic drug maker by sales.

The shares of Watson gained 8.82 percent to close at $63.69 on Wednesday's regular trading session.