US pharmaceutical giants Merck and Schering-Plough are to merge in a deal worth just over $41 billion.
The combined company will bear the name Merck after the deal is completed.
Both companies have significant operations in Ireland, employing around 2,000 people between them.
Merck Sharpe & Dohme has operations in Dublin and Tipperary, and late last year announced plans for 170 jobs at a new vaccine facility in Carlow. Schering-Plough has plants in counties Cork and Wicklow.
Under the terms of the agreement, Schering-Plough shareholders will receive 0.5767 shares and $10.50 in cash for each share of Schering-Plough. When the deal is complete, Merck shareholders are expected to own around 68% of the combined company and Schering-Plough shareholders 32%.
Last year's combined revenue of the two companies came to $47 billion. Schering-Plough generates about 70% of its revenue outside the US, including more than $2 billion a year from emerging markets. As a result, the merger will dramatically accelerate Merck's own international growth efforts.