NEW YORK (AP) -- Actavis is buying Warner Chilcott in an all-stock transaction valued at about $8.5 billion which would create the third-biggest specialty pharmaceutical company in the U.S.
The new company is expected to be called Actavis PLC and will be incorporated in Ireland, where Warner Chilcott is currently incorporated.
Warner Chilcott shareholders would own a 23 percent stake in the new company.
Warner Chilcott PLC shareholders will receive 0.160 shares of the new company for each share they own. This equals $20.08 per share, which is a 5 percent premium to Friday's closing price of $19.21. Actavis Inc. shareholders will receive one share of the new company for each share they own at closing.
Both companies' boards unanimously approved the deal, which is expected to close by year's end.
Warner Chilcott's stock rose slightly in Monday premarket trading.