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, a maker of nonprescription drugs and nutritional products, said Monday that it would acquire Agis Industries, the second largest drug company in Israel, for stock and cash worth $818 million.

Directors of both companies have approved the deal in which Agis shareholders will receive 0.8011 shares of Perrigo stock and $14.93 in cash for each share of Agis stock, which is traded on the Tel Aviv Stock Exchange. The proposal is worth $29.87 in cash and stock, or a 21.4% premium based on Agis' closing price on Nov. 14.

In early trading Monday, Perrigo's stock was down $1.17, or 6.3%, to $17.48.

The deal would give Perrigo shareholders control of 77% of the combined company, whose headquarters will remain in Allegan, Mich. For the fiscal year ended June 26, 2004, Perrigo earned $81 million on revenue of $898 million. For the year ended Dec. 31, 2003, Agis earned $31.3 million on revenue of $376 million.

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Agis was clearly an attractive target, and recently it had been the subject of takeover reports and rumors. The speculation became so intense that



issued a press release last week saying it was not in discussions to acquire Agis.

"This is the right transaction at the right time," said Dave Gibbons, chairman, CEO and president of Perrigo. The transaction is expected to close during between April and June of 2005. Perrigo said the acquisition will not dilute earnings per share during the fiscal year ending in June 2006 and will be accretive to EPS in fiscal 2007.

Perrigo said the acquisition will enable it to expand its global generic drug and consumer health products businesses and increase its strength in the store-brand nonprescription drug market. The Agis deal will add "products, pipeline and proprietary technologies" that will provide Perrigo with "the opportunity to accelerate growth," Gibbons said.