DAVOS, Switzerland, Jan 27 Ranbaxy Laboratories Ltd. RANB.BO expects an auction f

DAVOS, Switzerland, Jan 27 (Reuters) Ranbaxy Laboratories Ltd. expects an auction for the generic drugs business of Germany's Merck KGaA to kick off next month, its chief executive said on Saturday.

''It should start some time in February and we'll see how the process evolves and at what speed,'' Malvinder Singh said in an interview on the sidelines of the World Economic Forum.

Merck's generic drugs business, which the German company is considering divesting after acquiring Swiss biotech firm Serono, had revenues of 1.82 billion euros ($2.35 billion) in 2006. Some analysts believe it could be worth around 4 billion euros.

The Indian drugmaker said earlier this month it was interested in acquiring the business as part of an aggressive drive to expand internationally and could link up with private equity to bid.

Since then, Singh said he had been inundated by interest from potential private equity partners and had held discussions with several at a senior level -- including some meetings in Davos.

''We've been approached by a lot of them. We've had discussions with many of them at an operating level and a handful of them at my level. We're still seeing which way to move forward,'' he said.

Ranbaxy, which has a market value of around $3.5 billion, aims to be one of the top global generic players and has already expanded its business in Europe, buying Romania's Terapia for $324 million last year.

Adding the Merck business would vault it up the league table.

''It's a very strong global asset,'' Singh said. ''They have a very large global footprint. We have a large global footprint and together we would be in a much, much stronger position.'' The Merck operation is also likely to attract bids from rivals keen to build their position in the fiercely competitive and rapidly consolidating generics drugs sector.

Iceland's Actavis threw its hat into the ring on Friday by announcing it had selected three banks to help it fund a bid.

Industry analysts believe other offers could come from standalone private equity houses, as well as the industry's two market leaders -- Novartis AG's Sandoz unit and Israel-based Teva Pharmaceutical Industries Ltd .

REUTERS SRS RK1952