Teva has offered to buy Mylan in a cash-and-stock deal valued at about $40.1 billion.
The potential combination would result in a powerhouse of a generic drug developer competing against rivals such as Sun Pharma.
Teva Pharmaceutical Industries Ltd. offered to pay $82 per share, a 21 percent premium to Mylan's closing price on Monday.
Earlier this month Mylan NV offered to buy generic drug and ingredients maker Perrigo for about $29 billion.
Teva said Tuesday that its proposed Mylan buyout is more attractive. Teva's offer is contingent on Mylan not completing the proposed Perrigo deal.
Mylan last week expressed doubts that regulators would approve a deal between Teva and Mylan.