TORONTO ( TheStreet) --- Specialty drugmakers Biovail ( BVF) and Valeant ( VRX) have agreed to merge.

The combined company will be called Valeant Pharmaceuticals International. The new Valeant will have a "significantly expanded presence in North America and operations in eight other countries, working across four growth platforms," the companies said in a statement Monday.

Under the terms of the merger, Valeant stockholders will receive 1.7809 Biovail shares for each Valeant share they own plus a one-time special cash dividend of $16.77 a share.

Upon completion of the merger, which is expected to occur before the end of 2010, Biovail stockholders will own about 50.5% of the combined company while Valeant stockholders will own roughly 49.5%.

The companies said they will pay by Dec. 31 an additional dividend of $1 a share, after which the new Valeant doesn't intend to pay dividends.

-- Reported by Joseph Woelfel in New York.

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