Astellas Pharma Inc., Japan's No. 2 drug maker, said Monday it will buy U.S. cancer drug company OSI Pharmaceuticals Inc. for $4 billion in cash in a bid to expand its cancer drug business worldwide.

Astellas said it will pay $57.50 per OSI share, up from $52 the Japanese company had offered earlier. The transaction will be completed within a month.

The acquisition is part of Astellas' drive to expand its cancer drug business worldwide. OSI's drugs include Tarceva, for lung cancer, which generated $1.2 billion in global sales last year.

The Japanese maker said it hopes to jointly develop cancer drugs with OSI.

Apart from cancer, OSI focuses on oncology, diabetes and obesity treatments.