Ireland's Endo International has entered a definitive agreement with Auxilium Pharmaceuticals to acquire all of its outstanding shares of common stock for around $2.6bn.
The company will make the purchase at the rate of $33.25 per share in a cash and stock transaction, which has been unanimously approved by the boards of directors of both the companies.
Auxilium stockholders will conduct an election mechanism to elect cash and stock, all-stock or all-cash consideration.
The per share consideration represents a premium of 55% to Auxilium's closing price on 16 September, the day when Endo's proposal for Auxilium was made public.
The total cash consideration and the equity consideration will not exceed 50% and 75% of the total equity value respectively.
Endo president and chief executive officer Rajiv De Silva said: "By adding Auxilium's complementary commercial portfolio, we believe this transaction is aligned with our strategy of pursuing accretive, value creating growth opportunities.
"We intend to leverage Auxilium's leading presence in men's health, as well as our R&D capabilities and financial resources to accelerate the growth of XIAFLEX and Auxilium's other products."
As a result of the acquisition, Endo's pharmaceutical portfolio will have a broader offering of urology and orthopedic products that are natural complements to its current men's health and pain products. The company also aims to achieve annual cost synergies of about $175m.
Auxilium chief executive officer and president Adrian Adams said: "We are proud of the work Auxilium has done to develop a portfolio of important products that are improving the lives of patients to create significant stockholder value. We believe this transaction is the culmination of those efforts."