Biopharmaceutical company AbbVie Inc. (ABBV) has announced it will buy Botox manufacturer Allergan plc (AGN) in a cash and stock deal worth about $63 billion.

The transaction value represents a 45% premium to the closing price of AbbVie's shares of $78.45 on Monday. Allergan shareholders are set to receive 0.8660 AbbVie shares and $120.30 in cash for each Allergan share that they hold, which is a total worth $188.24.

Shares in Abbvie plunged over 10% during pre-market trading on Tuesday morning. Allergan stock on the other hand skyrocketed almost 30%.

The combined company is expected to have revenue of about $48 billion. The press release says the deal will provide pre-tax synergies and cost reductions of $2 billion in year three and add 10% to earnings-per-share over the first full year of the combination, with peak accretion of greater than 20%. The cash flow generated is expected to support a debt reduction target of $15 billion to $18 billion before the end of 2021.

Richard A. Gonzalez will stay on as chairman and chief executive officer of AbbVie. Allergan's chairman and chief executive officer, Brent Saunders, together with another Allergan director will join AbbVie's board. AbbVie will continue to be incorporated in Delaware and have its principal executive offices in North Chicago, Illinois.

"The combination of AbbVie and Allergan increases our ability to continue to deliver on our mission to patients and shareholders," said Gonzalez. "With our enhanced growth platform to fuel industry-leading growth, this strategy allows us to diversify AbbVie's business while sustaining our focus on innovative science and the advancement of our industry-leading pipeline well into the future."

"Our fast-growing therapeutic areas, including our world class medical aesthetics, eye care, CNS and gastrointestinal businesses, will enhance AbbVie's strong growth platform and create substantial value for shareholders of both companies," said Saunders.