PITTSBURGH -- Mylan Laboratories Inc. announced Thursday an agreement to acquire Dow B. Hickam Inc. in an exchange of stock.
The announcement sent the price of Dow B. Hickam stock soaring to $18.50 a share, up $8.50, in afternoon trading on the over-the-counter market.
Mylan was ahead 25 cents to $25 a share in New York Stock Exchange trading.
Terms of the agreement call for MLI Inc., a wholly owned subsidiary, to be merged with Dow B. Hickam, a Sugar Land, Texas, pharmaceutical company.
The boards of directors of both companies have approved a definitive agreement and plan of merger whereby Mylan will acquire all the common and preferred stock of Dow B. Hickam.
The merger is expected to be completed before the end of the year, Mylan said.
Stock will be exchanged at a rate of 0.85524 of a Mylan common share for each Dow B. Hickam common share, which number about 2.19 million.
In addition, there will be a cash redemption by Mylan of Dow B. Hickam's preferred stock for $1.01 million.