Israel's Teva Pharmaceutical Industries Ltd. said Monday it is purchasing Dublin-based Allergan PLC's generic pharmaceuticals business for $40.5 billion, in what Israeli analysts called the largest-ever acquisition by an Israeli company.

Statements from both companies say the deal will see Allergan receive $33.75 billion in cash and shares of Teva valued Monday at $6.75 billion. In light of the acquisition, Teva said it was withdrawing its $40 billion-plus takeover offer for pharmaceuticals company Mylan N.V.

The Israeli pharmaceutical giant is the world's largest generic drugmaker. It said in a statement that the acquisition would provide patients with more access to affordable medicines.

A big deal like this would allow the drugmaker to improve its profitability by cutting jobs and other overlapping costs from the combined businesses. It also would increase its leverage in negotiating drug prices with insurers and other payers, an ever-important piece of leverage in key markets like the United States, where insurers, employers and other payers are pushing to hold down rising costs that have outpaced inflation for years.

-- Associated Press