UPDATE 1-Sanofi-Aventis, Nichi-Iko to ink generics deal - Nikkei

May 27 (Reuters) - French drugmaker Sanofi-Aventis SNY.NSASY.PA will form a capital and operational tie-up with Nichi-Iko Pharmaceutical Co 4541.OS as part of a foray into the Japanese generic-drug market, the Nikkei business daily reported on Thursday.

Sanofi-Aventis will invest around 5 billion yen (about $55 million) to obtain nearly a 5 percent stake in Nichi-Iko, making it the second-largest shareholder of the company after its founding family, the daily said.

As per the agreement, Nichi-Iko will privately place about 1.5 million shares with Sanofi-Aventis as early as June, the daily reported.

The two firms will also form a joint venture in Japan, with Sanofi-Aventis obtaining a 51 percent stake and Nichi-Iko set to hold the remaining 49 percent, the daily said.

The two firms also plan to pursue joint development of bioengineered drugs down the road, the paper said.

$1=90.36 Yen Reporting by Krishnakali Sengupta in Bangalore; Editing by Vyas Mohan