The generic drugmaker Mylan is buying Abbott Laboratories' generic-drugs business in developed markets for stock valued at about $5.3 billion.
Mylan says the deal will diversify and expand its business outside the U.S. The combined company will be organized in the Netherlands and headquartered in Pittsburgh, which help reduce tax expenses.
The business to be acquired encompasses generic and specialty drugs sold in Europe, Japan, Canada, Australia and New Zealand. They accounted for about $2 billion in sales last year.
Abbott is keeping its branded generic drug business in emerging markets.
Abbott will own about 21 percent of the combined Mylan company but does not intend to remain a long-term shareholder.
The deal is expected to close in early 2015.
Mylan is based in Canonsburg, just outside of Pittsburgh.