Pharmaceutical companies Mallinckrodt plc and Endo Inc (OTCQX:NDOI) announced on Thursday that they have entered into a definitive agreement to merge in a stock and cash transaction, forming a global pharmaceutical company with an estimated enterprise value of USD6.7bn.

Mallinckrodt will continue as the holding company for the combined business, and Endo will become a wholly-owned subsidiary of Mallinckrodt.

Endo shareholders will receive USD80m in cash and hold 49.9% of the combined entity, while Mallinckrodt shareholders will retain 50.1%.

The merged company is expected to generate USD3.6bn in pro forma 2025 revenue and USD1.2bn in adjusted EBITDA. It will target at least USD150m in annual pre-tax operating synergies by Year 3, with approximately USD75m in savings expected in the first year.

Mallinckrodt and Endo will integrate their generics businesses and Endo's sterile injectables segment post-merger, with plans to separate this unit later.

The company's branded portfolio will include key treatments such as XIAFLEX, Acthar Gel, Terlivaz, SUPPRELIN LA and AVEED.

With 17 manufacturing facilities, 30 distribution centres and approximately 5,700 employees, the company will primarily operate in the United States, supported by facilities in Europe, India, Australia and Japan.

The transaction has been approved by both companies' boards of directors and is expected to close in the second half of 2025, subject to shareholder and regulatory approvals. The combined company will be listed on the New York Stock Exchange.