Teva announced it will buy Tevas Pharmaceuticals for $5 billion on Monday, and that it plans to pay $2.4 billion in cash for the stock.
Teva shares fell 2.7% after the deal was announced.
Tevas CEO Andrew Kress said the company will continue to focus on its primary focus, including expanding the value of its patient-centered care model.
The company has more than 5 million prescriptions per day, and has more prescriptions filled per day than any other drug company in the world.
The acquisition is expected to close by the end of 2019, and will be led by Kress.
Tevi Pharmaceuticals shares dropped 2.8% after news of the deal broke.
The Teva acquisition will create a global leader in the development of an early-stage drug candidate, which Kress says will be a game-changer for the industry.
Tevas shares have risen 14% in the past 12 months.
The $5-billion deal was first reported by The Wall Street Journal.
Tevanis shares have declined 6.6% in 2017.