Generic drugmaker Actavis, which has been the subject of takeover speculation, plans to buy specialty pharmaceutical company Warner Chilcott for $5 billion in stock.

The companies said the deal had an enterprise value, including debt, of $8.5 billion.

The move comes as Actavis has spurned approaches from Canadian pharmaceutical company Valeant Pharmaceuticals International and Mylan. Analysts have said that if Actavis were to buy Warner Chilcott, it would kill the chances of its being taken over.

Warner Chilcott shareholders will receive 0.16 share of the combined company. The companies said that would equate to $20.08 per share, based on Actavis' closing share price of $125.50 on Friday.

The purchase price is a 34% premium to Warner Chilcott's closing share price of $15.01 on May 9, the day before the companies disclosed that they were in talks. Warner Chilcott shares have since risen and closed on Friday at $19.19, narrowing the premium to less than 5%.

Warner Chilcott brings a portfolio of branded women's health pharmaceuticals such as the contraceptive patch to Actavis, which makes and sells generic version of drugs that are no longer protected by patents. Because Warner Chilcott is based in Ireland, the deal creates a money-saving lower tax rate for Actavis, analysts have said. The combined company would have $11 billion in annual sales.