Topping a bid by rival Valeant (VRX), Teva Pharmaceutical (TEVA) has inked a deal to acquire Cephalon (CEPH) for $6.8 billion in an effort to build on its long-term strategy of diversification. 

The Israeli generic drug maker’s $81.50 a share purchase price represents a 39% premium to its closing price on March 29, its last closing price before the proposal was made public. The deal marks a 6% premium to its closing price on Friday, and tops an $81.50-a-share deal by Valeant.

Teva said the acquisition is expected to support its stated goal of growing branded revenues to more than $9 billion in 2015 from $4.6 billion last year. The company has built on these goals through a set of acquisitions, including generic drug maker’s Barr Pharmaceuticals in 2008.

The company will have a combined portfolio of roughly $7 billion in sales, with a pipeline including more than 30 late-stage compounds. Teva expects to realize annual cost synergies of at least $500 million starting in 2014.

“We have been following Cephalon for a long time and are very happy with the opportunity to join forces,” Shlomo Yanai, the company’s chief executive, said in a statement. “Our significantly broader portfolio will permit marketing and sales synergies and enhance profitability.”

The transaction, which Teva said will create “immediate and sustainable value” in niche therapeutic areas, is slated to close in the third-quarter of this year, pending customary closing conditions.

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