NEW YORK (The Deal) -- In one fell swoop, Jordan's Hikma Pharmceuticals is set to become the sixth-largest U.S. generic drug maker after an agreement to buy Boehringer Ingelheim's Columbus, Ohio-based Roxane Laboratories for about $2.65 billion.

Hikma will pay $1.18 billion in cash and issue 40 million new Hikma shares, or 16.71% of its enlarged share capital, to the German seller. The buyer, whose shares trade in London and Dubai, will also make up to $125 million in cash milestone payments. Hikma based the valuation on an agreed share price of 2,350 pence ($36.70) per Hikma share, a 13% premium over Monday's London close, and an exchange rate of $1.56 to the British pound.

On Tuesday, Hikma shares climbed 7.2% in London to give it a market value of around £4.14 billion ($6.46 billion).

The Roxane acquisition, which is due to close in the fourth quarter, was announced a day after Israel's Teva Pharmaceuticals (TEVA) - Get Report agreed to buy Allergan's (AGN) - Get Reportgenerics business for $40.5 billion, and ended its five-month pursuit of Netherlands-registered generics giant Mylan (MYL) - Get Report . It also comes a year after Hikma bought Boehringer's U.S. generic injectables business, known as Bedford Laboratories, for up to $300 million. In January, Boehringer announced that it was considering selling Roxane.

For Hikma, the Roxane acquisition will add 88 products in segments including oncology, extended release and controlled substances amid projected 6% compound growth in the U.S. generics market over the next five years. It will also add a pipeline of 89 potential products, 32 of which are currently awaiting approval from the U.S. Food and Drug Administration.

Hikma already sells non-injectable generic products in the US., which accounted for 2014 revenue of $216 million or 15% of the group total. It's targeting Roxane revenue of $725 million to $775 million in 2017 and a medium-term EBITDA margin of around 35%.

"This transaction has significant strategic value for us, transforming our position and scale in the U.S. generics market," said CEO Said Darwazah in a statement. "Roxane's impressive portfolio, attractive pipeline and R&D expertise, focusing on higher value, niche and differentiated products, will create a platform for sustainable long-term growth.

In a conference call, Darwazah added that the Jordanian company had spent a long time choosing the right partner. "As you know, scale is important in this market," he said, predicting that the U.S. generics market will bring strong growth opportunities for many years. "We are confident that the combination of Roxane and our non-injectables business will provide a platform for further value creation."

The CEO of Hikma's U.S. unit West-Ward, Michael Raya, added: "This impressive R&D engine has delivered strong product results."

More than 90% of the products sold by Roxane have a top-three market position, and three-quarters have three or fewer competitors. Roxane, founded in 1885 as The Columbus Pharmaceutical Co., was purchased by Boehringer in 1978 after which its name was changed to Roxane. Today, Roxane has 13,60 employees and gross assets of $967 million at the end of 2014. Its sprawling manufacturing site in Columbus makes medicines in solid, liquid, dry-powder inhalers and nasal spray dosage forms.

Hikma's ambitions for Roxane go beyond an initial trans-Atlantic splash.

"Whilst Hikma's short-term focus will be on continuing to growth Roxane's product portfolio an market share in the U.S., the board also intends to take these products into the company's markets over time, particularly Roxane's portfolio of oncology products, in the MENA [Middle East and North Africa] region," it said.

Hikma plans to finance the acquisition with cash, existing and new bank facilities, and a share issue.