NEW YORK (TheStreet) -- Shares of Abbott Laboratories (ABT) are up 1.84% to $42.06 after Mylan (MYL) said it would buy Abbott's specialty and branded generics business in developed markets outside the U.S. in an all-stock transaction valued at about $5.3 billion, Reuters reports.
The deal has also been structured to help Mylan reduce its tax bill by moving its tax address outside the U.S., a practice known as tax inversion that has become popular among healthcare companies, Reuters noted.
Under the deal, Abbott will transfer the assets to a new public company organized in the Netherlands, after which Mylan will merge with a wholly owned unit of the new company, Reuters said.
Abbott will receive 105 million shares of the combined company, giving it about 21% ownership stake.
Shares of Mylan are higher by 2.99% to $51.70.
TheStreet Ratings team rates ABBOTT LABORATORIES as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate ABBOTT LABORATORIES (ABT) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and weak operating cash flow."