As per the agreement, Watson acquired Ascent Pharmahealth for AU$375 million (approximately $393 million) in cash.
Watson expects the deal to be immediately accretive to 2012 non-GAAP earnings.
Ascent markets a broad portfolio of generics, brands, branded-generic and over-the-counter (OTC) and dermatology and skin care products in Australia with approximately 14% market share.
Watson president and CEO Paul Bisaro said this acquisition establishes Watson among the leaders in the AU$12 billion Australian pharmaceutical market, where the generic market is growing at approximately 8%.