Merck & Co., Inc. (NYSE:MRK) has officially entered into an agreement to pay $102 per share for antibiotic maker Cubist Pharmaceuticals Inc (NASDAQ:CBST). Reports of negotiations between the two companies appeared over the weekend, and this morning they formally announced details on the proposal.

Merck, Cubist Pharmaceuticals announce deal

In a press release this morning, the two companies announced that Merck will pay $102 per share in cash to buy Cubist. That’s a 25% premium to Cubist’s average share price over the last five trading days. Both companies’ boards of directors unanimously approved the definitive agreement. The offer is worth $8.4 billion in equity and includes $1.1 billion in net debt. Including that net debt and other considerations, the companies said the deal has a total value of about $9.5 billion.

Merck management expects the acquisition of Cubist Pharmaceuticals to increase its 2015 revenue base by more than $1 billion but be neutral to non-GAAP earnings per share in 2015. They expect the deal to be “significantly accretive” to non-GAAP earnings per share starting in 2016 and going forward from there.

Under the definitive agreement, one of Merck’s subsidiaries will make a tender offer to buy all of Cubist’s shares. The acquisition is expected to close in the first quarter of 2015.

What Merck gets from Cubist

With the acquisition, Merck receives the antibiotic drug Cubicin, along with a number of other antibiotic drugs. Cubist also brings a drug that assists patients as they recover from bowel surgery and is expected to receive approval for another antibiotic yet this month. Analyst Adnan Butt reportedly told CNBC he expect Zerbaxa to rake in over $1.5 billion in revenue annually.

The Financial Times reports that the acquisition of Cubist Pharmaceuticals marks Merck’s second big deal within just six months. In June, the drug maker paid $3.85 billion to acquire Idenex Pharmaceuticals.

The acquisition also fits in with a broader theme that has spanned much of this year as several pharmaceuticals companies have merged or purchased assets from each other.

Cubist Pharmaceuticals Inc CBST