Generic drug maker Actavis Inc recently announced the purchase of specialty pharmaceutical company Warner Chilcott Plc.

Under the agreement, Actavis will acquire Warner Chilcott  in a stock-for-stock transaction valued at approximately $8.5 billion. If successfully completed, the transaction will create a global specialty pharmaceutical company with approximately $11 billion in combined annual revenue, states Actavis in a press release.

The Warner Chilcott acquisition brings two new businesses – gastroenterology and dermatology – and adds additional women’s health drugs like branded contraceptives to Actavis, which makes and sells drugs that are no longer under patent protection. This is the second major purchase in the past two years for Actavis, which competes against larger companies like Teva Pharmaceuticals Industries Ltd and Mylan Inc.

“Commercially, this transaction is unique in the combination of the complementary strengths of our two companies. The combination will enhance the value of each company’s portfolio and provides a substantial foundation to support the successful launch of new products over the next several years, particularly in Women’s Health, including Minastrin 24 Fe, Esmya, metronidazole vaginal gel 1.5%, the progestin-only contraceptive patch and other women’s health products in development from the recent acquisition of Uteron Pharma SA. It also provides an expanded portfolio of specialty products that have the potential to be commercialized in key markets outside of North America,” said Actavis President and CEO Paul Bisaro.

At the close of the transaction, which is expected by year-end 2013, Actavis and Warner Chilcott will be combined under a new company incorporated in Ireland, where Warner Chilcott is currently incorporated.  The newly created company, which is expected to be called Actavis plc, or a variant thereof (“New Actavis”), will be led by the current Actavis leadership team.