Actavis plans to acquire Botox-maker Allergan for $66 billion to create one of the top 10 global pharmaceutical companies by sales, the companies announced Monday.
The combination creates a heavyweight in opthalmology, neurosciences and medical aesthetics and puts an end to an aggressive rival bid for  Allergan from Canada's Valeant Pharmaceuticals International.
The companies said the deal would result in $1.8 billion in annual cost savings, improved marketing success by combining sales forces and expanded reach into key growth markets in Asia and Latin America.
"We will establish an unrivaled foundation for long-term growth, anchored by leading, world-class blockbuster franchises and a premier late-stage pipeline that will accelerate our commitment to build an exceptional, sustainable portfolio," said Brent Saunders, chief executive of Actavis.
Actavis will pay $219 per share for Allergan in a mix of cash and Actavis shares, with the deal totalling approximately $66 billion. Actavis is headquartered in Dublin and has administrative headquarters in the US in the state of New Jersey.
Meanwhile rival bidder Valeant announced it would not raise its bid. Valeant has pursued Allergan since April, but was repeatedly met with refusals to enter negotiations.
Three weeks ago, Valeant floated raising its bid by $10 billion to $60 billion by offering "at least $200 a share" for the US company.
Monday's transaction is subject to shareholder votes by both Actavis and Allergan. The companies expect the deal to close in the second quarter of 2015.
In early trade, Allergan shares jumped 6.7 percent to $211.86, Actavis rose 3.4 percent to $252.01 and Valeant advanced 0.3 percent to $134.61.