British drug maker GlaxoSmithKline PLC (NYSE: GSK) said Monday it will pay $2.9 billion to buy American dermatology business

Privately held Stiefel operates a research and development lab in RTP. The company renovated a 155,000 square foot facility once owned by Eli Lilly. It planned to invest more than $50 million in the RTP operation over five years. The lab opened two years ago..The company planned to employ as many as 250 people, mostly scientists, in RTP.

GSK’s U.S. headquarters also are in RTP.

GSK will also assume $400 million in debt and has agreed to a further payment of up to $300 million depending on performance, bringing the total cost of the deal to up to $3.6 billion.

Stiefel, whicxh is based in Coral Gables, Fla, makes acne treatments and other skin creams, lotions, washes and vitamins. The company put itself up for sale earlier this year, and reportedly had drawn interest from Johnson & Johnson and Novartis AG as well as Glaxo.

Rumors began circulating a month ago that Stiefel was for sale.

Interested buyers reportedly include GSK as well as Johnson & Johnson, Novartis, Abbott Laboratories, Sanofi-Aventis and Allergan.

The Wall Street Journal and Reuters reported in March that Stiefel has asked Blackstone Group to seek offers.

Blackstone owns a minority stake in Stiefel. It invested $500 million in Stiefel two years ago, according to Private Equity Wire.

Reuters estimated at the time that the company could be worth $3 billion or more.

Stiefel is a 160-year-old venture.

Glaxo shares were up 0.8 percent at 1046.0 pence on the London Stock Exchange.

The company said its existing prescription dermatological products will be combined with Stiefel’s and sold under the Stiefel brand.

Stiefel’s leading products include Duac for acne, Olux E for dermatitis and Soriatane for severe psoriasis. Stiefel’s sales in 2008 were approximately $900 million, while Glaxo’s sales of dermatology products was around $550 million, the company said.

"This transaction will create a new world-leading, specialist dermatology business and re-energize our existing dermatology products," said Andrew Witty, Glaxo’s CEO.

"The addition of Stiefel’s broad portfolio will provide immediate new revenue flows to GSK with significant opportunities to enhance growth through leveraging our existing global commercial infrastructure and manufacturing capability."

Stiefel was founded by John David Stiefel in Offenbach-on-Main, Germany in 1847 as a candle maker, but later switched to medicated soaps. The company moved to the United States in 1910, and now has factories in the United States, Mexico, Brazil, Singapore, Ireland and Pakistan.