King Pharmaceuticals acquires Medco Research

King Pharmaceuticals has entered into a definitive agreement to mergewith Medco Research in a tax-free pooling of interests transaction valued at around $350 million. Both parties expect to complete the transaction during the first six months of next year, subject to approval of the merger by holders of a majority of outstanding Medco common stock.

Under the terms of the agreement which, based on the closing price of King's common stock on November 30 values each Medco share at $31.45, the former can acquire up to 19.9% of Medco's common stock. These terms have been approved by the boards of directors of both companies. King expects the transaction to be accretive to earnings immediately upon closing, adding approximately 10% to projected earnings per share.