PITTSBURGH (AP) — The generic drugmaker Mylan is buying Abbott Laboratories' generic-drugs business in developed markets for stock valued at about $5.3 billion.
Mylan said Monday that the deal will diversify and expand its business outside the U.S. The combined company will be organized in the Netherlands, which will help reduce its tax expenses. The company will keep its headquarters near Pittsburgh.
The deal is expected to lower Mylan's tax rate to approximately 20 percent to 21 percent in the first full year, and to the high teens after that.
Several other U.S. companies are using mergers to reincorporate in countries with lower tax rates. These moves are raising concerns among U.S. lawmakers because they can cost the federal government billions in tax revenue.
The business to be acquired by Mylan encompasses more than 100 generic and specialty drugs sold in Europe, Japan, Canada, Australia and New Zealand. Some of the products include Creon, Influvac, Brufen, Amitiza and Androgel. It also include manufacturing plants in France and Japan.
The portfolio of products accounted for about $2 billion in sales last year.
Abbott is keeping its branded generic drug business in emerging markets. That business had 2013 sales of $2.9 billion. It is also keeping its other businesses and products in developed markets.