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.

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.

Bain Capital said the deal came about following several recent initiatives by the Japanese government and regulators to “accelerate the development and approval of innovative medicines in the Japanese market.