Abbott Labs sells branded generics business to Mylan in $5.3 billion deal

Following a weekend of rumors and speculation, USA-based generics major Mylan (Nasdaq: MYL) and health care firm Abbott Laboratories (NYSE: ABT) this morning confirmed they have entered into a definitive agreement whereby Mylan will acquire Abbott's non-US developed markets specialty and branded generics business in an all-stock transaction.

Under the deal, Abbott will transfer the assets to a new public company organized in the Netherlands, with Mylan subsequently merging with the new entity. Abbott will receive 105 million shares of the new company, representing an ownership stake of around 21%, worth about $5.3 billion based on Mylan's closing price of $50.20 on Friday.

Will reduce tax rate