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Perrigo to Buy Elan for $8.6 Billion

DUBLIN -- U.S. drugmaker Perrigo (PRGO) has agreed to buy Ireland's Elan (ELN) for $8.6 billion in a deal designed to expand overseas and reduce its tax bill.

Michigan-based Perrigo said it will pay Elan investors $6.25 per share in cash and $10.25 in Perrigo stock. The deal represents an 11% premium over Elan's closing price Friday.

Earlier this month, Elan said it was open to offers after spending months fighting a hostile, lower-priced takeover bid by Royal Pharma.

Perrigo said Monday it will become an Irish-based company and said it could cut its tax liabilities nearly in half, saving more than $150 million annually.

About 700 U.S. companies based in Ireland pay a 12.5% rate of tax on profits, versus the U.S. rate of 35%.

Elan confirmed the deal.

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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