US drugs company Actavis on Monday agreed to buy Irish peer Warner Chilcott for $8.5 billion (6.6 billion euros) including debt, in a bumper takeover that creates a key global player. \"Actavis, Inc. and Warner Chilcott plc today announced they have entered into a definitive agreement under which Actavis will acquire Warner Chilcott plc in a stock-for-stock transaction valued at approximately $8.5 billion,\" the two groups said in a joint statement. \"If successfully completed, the transaction will create a leading global specialty pharmaceutical company with approximately $11 billion in combined annual revenue, and the third-largest US specialty pharmaceutical company with approximately $3 billion in annual revenues.\" The acquisition of Dublin-based Warner Chilcott will strengthen Actavis\'s portfolio of drugs for women\'s health and urological conditions, and add new franchises in products for dermatology and gastroenterology. The deal will also help Actavis - whose core generic-drug business faces difficult market conditions -- further diversify into patented and brand-name drugs. Actavis will swap 0.16 of a share for each Warner Chilcott share, valuing it at about $20.08 a share. That represented a 4.5-percent premium to Friday\'s closing level. The enlarged Actavis group will be led by the current Actavis management team. Warner Chilcott shareholders will hold about 23 percent of the company. \"We wanted to get bigger in our brand business and this was a perfect opportunity for us,\" Actavis chief executive Paul Bisaro said on a conference call following the announcement. The deal will have the \"added benefit\" of helping to lower Actavis\'s relatively high effective tax rate, he said, which should improve its global competitiveness. The transaction, expected to close by the end of 2013, has been unanimously approved by the boards of both companies and will generate \"substantial\" cost savings, according to the statement. More than $400 million in after-tax operational synergies and related cost reductions and tax savings are anticipated, with most of those savings expected in 2014. The two companies had disclosed earlier this month that they were in talks over a possible deal. \"We have set as our strategic corporate objective to build a leading global specialty pharmaceutical company,\" said Bisaro in the statement. \"The combination of Actavis and Warner Chilcott creates a strong specialty brand portfolio focused in therapeutic categories with strong growth potential, and is supported by a deep pipeline of development programs.\" He added that the deal would create a \"powerful\" global player. \"The combination is commercially and financially compelling, and reshapes the specialty pharmaceutical universe by creating a powerful global competitor. \"It creates a company with an exceptionally strong balance sheet, coupled with a favourable tax structure to support future growth.\" In a separate development earlier on Monday, Irish biotechnology company Elan announced a series of deals to boost growth, in the face of a $6.0-billion hostile takeover approach by US group Royalty Pharma. Dublin-based Elan said it was buying two small drugmakers, selling one of its drugs in development, buying back $200 million in shares and finally issuing $800 million of debt.