NEW JERSEY, N.J. (Reuters) – New Jersey’s regulators approved a $8,542 million merger between two New Jersey-based drugmakers on Wednesday, clearing the way for a $2.5 billion sale to a New York company.
The merger, which would have combined New Jersey and AstraZeneca Inc’s drug business, would have created Astra Zeneca, the largest U.S. generic drugmaker by sales and one of the largest generic drugmakers in the world.
It would also give Astra’s New Jersey subsidiary, Mylan NV, access to Mylan’s portfolio of drug products and provide access to its existing assets.
The deal was announced by the New Jersey Office of Investment and Commerce, which oversees drug deals.
New Jersey’s Department of Banking and Insurance approved the merger on Tuesday, setting a new record for a merger of a drugmaker with a competitor.
The approval comes at a time when Astra has been battling with rival Johnson & Johnson & Johnson and Valeant Pharmaceuticals International Inc, two of the country’s largest generic companies.
Astra and Johnson&Johnson&:Johnson&, which merged with Purdue Pharma last year, have had some of the worst quarterly results in the industry.
The merger is expected to have a major impact on Astra, which is facing an onslaught of generic competition.
New York State is also evaluating the deal, which was first reported by the Wall Street Journal.
AstraZeneca shares rose 1.5 percent to $20.26 on Wednesday after the news broke.
Shares of Mylan, the countrys largest generic pharmaceutical company by sales, gained 3.4 percent to close at $50.82.
The transaction would create Astra shares worth $843 million, or 76 percent of the combined company’s assets, the companies said in a statement.
The Astra/Mylan merger is one of several deals Astra is pursuing to improve its brand.
Last year, Astra announced a deal with Bayer AG that will give the company an exclusive license to produce the cancer drug Daraprim, as well as another generic drug, Sovaldi.