LONDON (Reuters) - German generic drugmaker Stada STAGn.DE is vying with a group of European buyout funds for control of Bristol-Myers Squibb's BMY.N French over-the-counter drugs business, sources familiar with the matter told Reuters.

Slideshow ( 2 images )

The business, known as Upsa, was put up for sale over the summer. Bidders were asked to submit their offers ahead of a deadline of Oct. 5, the sources said. Investment banks were hired to launch an auction in the second half of the year.

The deal is potentially worth about 1 billion euros ($1.15 billion) and comes amid a wave of consolidation in the consumer health sector as big drugmakers are increasingly focusing on their strongest areas.

Private equity funds are attracted by high growth in the over-the-counter drug business, where demand is being driven by aging populations and health-conscious consumers.

Upsa, which makes Dafalgan and Efferalgan painkillers, has also received indicative bids from BC Partners, CVC Capital Partners and PAI Partners as well as Stada, which is controlled by private equity funds Bain Capital and Cinven.

Stada, BC Partners, CVC and PAI declined to comment while officials at Upsa were not immediately available for comment.

France's pharmaceutical and cosmetics group Pierre Fabre and U.S.-run drugmaker Mylan NV MYL.O had initially studied the dossier and joined the race for the business, one of the sources said.

But a spokeswoman for Pierre Fabre said the company had not made a bid.

UNION OPPOSITION

Upsa generated revenue of 425 million euros in 2017 and core earnings of about 100 million euros.

One of the sources said the business might fetch less than 1 billion euros, saying that the company had a workforce of about 1,500 people and local unions would oppose any significant restructuring following a change of ownership.

Bristol-Myers advisers Deutsche Bank DBKGn.DE and Jefferies JEF.N had initially sounded out large consumer groups such as Procter & Gamble PG.N and Reckitt Benckiser RB.L as well as pharma companies Pfizer PFE.N and Johnson & Johnson JNJ.N, the sources said, but it was unclear whether any of these groups had shown any interest.

In April, Procter & Gamble agreed to pay 3.4 billion euros for Merck KGaA's MRCG.DE vitamin brands and earlier this year GlaxoSmithKline GSK.L agreed to buy Novartis NOVN.S out of their consumer healthcare joint venture for $13 billion.

Bristol-Myers wants to concentrate on high-margin prescription drugs, particularly for cancer, and has previously divested a series of non-core assets including the 2009 spin-off of its baby food unit Mead Johnson Nutrition.

($1 = 0.8712 euros)