U.S. private equity firm Bain Capital has bought Mitsubishi Tanabe Pharma in a deal worth 510 billion yen ($3.4 billion), saying it was encouraged by prospects of regulatory change for Japan's drug industry.

Bain said its decision to buy Mitsubishi Tanabe is due to the “strong growth potential” of Japan’s healthcare industry.

The Japanese chemical company has agreed to sell its pharmaceutical business to Bain Capital for more than $3 billion, in a bid to focus on its key businesses.