Investing.com - Israeli drug-maker Teva Pharmaceuticals (ARCA:TEVA) agreed to acquire the generic-drug division of Allergan (NYSE:AGN) in a cash-plus-stock deal valued at $40.5 billion, it announced on Monday.
Allergan will receive $33.75 billion in cash and shares in Teva valued at $6.75 billion, giving it a 10% stake in the enlarged company, according to a statement from the Israeli company.
Teva, already the world's biggest seller of generic medicines, said the acquisition reinforces its strategy in the generics industry.
"This strategic acquisition brings together two leading generics businesses with complementary strengths, brands and cultures, providing patients with more affordable access to quality medicines, and creating significant financial benefits for Teva stockholders," the company said in a statement.
The Israeli drug-maker added that it has withdrawn its cash and stock proposal for rival Mylan (NASDAQ:MYL).
Teva will host a conference call and live webcast at 8:00AM ET to discuss the announcement.
U.S.-listed shares of Teva surged 11.8% in pre-market trade. Meanwhile, Allergan rose 5.5% premarket in New York, while Mylan (NASDAQ:MYL) shares slumped 11.9%.
U.S. stock market futures pointed to a lower open. The Dow futures indicated a loss of 0.25%, the S&P 500 futures pointed to a drop of 0.2%, while Nasdaq 100 futures dipped 0.35%.