Add one more to the litany of pharmaceutical company mergers that are being made to avoid U.S. taxes. Abbott Laboratories (NYSE: ABT) has agreed to sell its non-U.S. generic drug business to Mylan Inc. (NASDAQ: MYL) in an all-stock transaction valued at $5.3 billion. Mylan will form a new company based in the Netherlands, of which Abbott will own approximately 21%.

The deal will combine all Mylan’s existing business with Abbott’s generic drug business in developed markets outside the United States. Mylan expects the combined company’s effective tax rate to drop from 25% to 21% in the first year of the combination and to fall further in future years.

Mylan will acquire more than 100 debt-free specialty and generic drugs from Abbott and expects to generate an additional $1.9 billion in annual revenues once the deal closes. The transaction is expected to close in the first quarter of 2015. On a pro forma basis, Mylan expects 2014 revenues to total approximately $10 billion.

Abbott will transfer the assets to a new publicly traded company that will be called Mylan N.V. and that will become the parent company of the current Mylan. Stock in the new company will continue to trade on the Nasdaq under the company’s existing ticker symbol. Mylan N.V. will be led by Mylan’s existing management and will continue to be headquartered in Pittsburgh.

According to the press release, current Mylan shareholders “will recognize gain for U.S. federal income tax purposes on the exchange of Mylan common shares for New Mylan ordinary shares.”

Abbott shares traded up about 0.7% Monday morning, at $41.57 in a 52-week range of $32.70 to $41.96. Shares opened at $41.95, but pulled back slightly.

Mylan’s stock was up 1.9%, at $51.15 in a 52-week range of $31.64 to $57.52.

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