Mylan Inc. (NASDAQ:MYL) shares were higher over 2% recently after saying it has agreed to buy Abbot’s (ABT) non-U.S. developed markets branded generics pharmaceuticals business for $5.3 billion in stock, or 21% of Mylan.

“The numerous strategic and financial benefits of this transaction will allow Mylan to potentially accelerate achievement of our long-term financial targets to the benefit of our shareholders,” chairman Robert Coury said in a statement. Specifically, Mylan said the transaction could potentially accelerate its previously stated financial targets for 2018, including at least $6.00 in adjusted diluted EPS.

It said the deal will be immediately and “significantly” accretive, with expected year one adjusted diluted EPS accretion of approximately $0.25, increasing thereafter through 2018. It is also expected to deliver in excess of $200 million in pre-tax operational efficiencies by the end of year three post-close. Mylan said the deal will strengthen its commercial platform outside the U.S., building new opportunities for growth and additional sales channels in the acquired markets. It is expected to provide it with an additional $600 million of annual post-close EBITDA.

Mylan said the assets are expected to boost sales by $1.9 billion a year. Abbott meanwhile said it will retain its branded generics pharmaceuticals business and products in emerging markets. Abbott also retains its other businesses and products in developed markets.

The business to be sold operates in Europe, Japan, Canada, Australia and New Zealand and includes approximately 3,800 employees. It includes a portfolio of medicines, as well as manufacturing facilities in France and Japan. Abbott will retain its product portfolio and manufacturing facilities in other geographies as well as its manufacturing facilities in the Netherlands, Germany and Canada.

Abbot said the sale is expected to increase its sales growth rate by 100 basis points, and the growth rate of its ongoing net income will be in excess of 200 basis points higher. The ongoing net income associated with Abbott’s developed markets pharmaceuticals business is expected to be approximately $0.22 per share in 2015. Accordingly, Abbott’s ongoing earnings per share from continuing operations is expected to be lower following the close of this transaction by this amount.

The assets sold will be carved out of Abbot and transferred to a new public company that will be organized in the Netherlands. Immediately after this, Mylan will merge with a wholly owned subsidiary of the new public company. The new public company will be called Mylan N.V. and will be led by the current Mylan leadership team and headquartered in Pittsburgh. Mylan N.V. will continue to trade in the U.S. under the existing ticker MYL.

MYL is trading in the upper half of the 52-week range between $31.41 and $57.52. ABT was up 0.6%, having earlier touched $41.95, a cent short of the 52-week high. The 52-week low is at $41.96.

Get Free Updates and Stock Alerts!

*We only send one email per week