Buyout group CVC and Singapore state fund Temasek, which bought a controlling stake in Alvogen in 2015 at a valuation of $2 billion, have asked investment bank Jefferies to find a buyer for Alvogen's CEE business, which may be valued at up to $1 billion, they added.
CVC and Jefferies declined to comment, Temasek was not immediately available for comment.
A sale of the operations would come amid a flurry of other generics company deals.
Buyout group Advent earlier this week bought Sanofi Zentiva unit, beating groups such as Carlyle, BC Partners, Blackstone, Nordic Capital, as well as Brazilian drugs firm EMS and India's Torrent Pharma.
Bain and Cinven last year acquired Germany's Stada, beating rivals Advent and Permira.
Separately, Novartis is considering a sale of its generics business, people familiar with the matter have said.
While Alvogen's owners have not begun an official auction, they have started reaching out to the firms that showed an interest in Stada and Zentiva.
"The private equity owners of these companies have said that they want to use the platforms to build strong generics players, so most of the groups which showed an interest in Zentiva and Stada are expected to raise their hands for Alvogen's Eastern European ops," one of the sources said.
Alvogen was founded in 2009 by former Actavis Chief Executive Robert Wessman, who has since built it into a maker of generics, over-the counter and biosimilar drugs with operations in 35 countries, employing 2,800 staff.
In Central and Eastern Europe, Alvogen has manufacturing facilities in Romania and a packaging centre in Serbia serving the entire region.
Last year, Alvogen's controlling shareholders held talks with Shanghai Pharmaceuticals over the sale of Alvogen's U.S. business, according to media reports, but no deal materialised.
(Additional reporting by Ben Martin; Editing by Mark Potter)
By Arno Schuetze and Pamela Barbaglia