Mylan said today it wants to buy Perrigo for $28.9 billion cash and stock, creating a combined giant with a diverse mix of branded, generic, over-the-counter drugs, and nutritional products.

Mylan made its unsolicited proposal in a letter dated Monday and delivered to Joseph C. Papa, Perrigo’s president, CEO, and chairman, and disclosed by Mylan today.

“This proposal is the culmination of a number of prior discussions between Mylan and Perrigo about the compelling strategic and financial logic of this combination,” Mylan's executive chairman Robert J. Coury said in a statement. “This combination would result in meaningful immediate and long-term value creation, and our proposal is designed to deliver that value to shareholders and other stakeholders of both companies.”

Perrigo responded today with a terse statement that confirmed receipt of the letter: “The board of Perrigo will meet to discuss the Proposal and a further announcement will be made when appropriate.”

Perrigo manufactures and markets over-the-counter (OTC) and prescription drugs, as well as nutritional products and active pharmaceutical ingredients. Perrigo also receives royalties from sales of the multiple sclerosis drug Tysabri®—reporting $86.6 million in such royalties during its fiscal 2015 second quarter ending December 27, 2014.

Mylan alone manufactures and markets approximately 1,400 generic drugs as well as several branded treatments—though the company’s first product to generate more than $1 billion in annual net sales in 2014 was not a drug, but the EpiPen®(epinephrine) Auto-Injector for life-threatening allergic reactions.

Coury asserted that the Mylan-Perrigo combination—which generated about $15.3 billion in 2014 pro forma sales—could generate “significant and meaningful synergies” or cost-cutting by both companies should a deal be completed. The extent of that cost-cutting was not quantified in the letter or in a Mylan announcement of the offer.

The combined company, Coury continued, would also enjoy “an unrivaled combined manufacturing platform, renowned supply chain capabilities, vertical integration and global sourcing excellence.”

Coury offered Papa a position as co-chairman of the combined company and member of its expanded Board—with the possibility of including other Perrigo directors

Coury said he would leave Mylan’s top management intact, with him continuing to serve as executive chairman, Heather Bresch as CEO, and Rajiv Malik as president: “We envision the combined company leveraging the best of our collective management and employee talent.”

To that end, Coury cited by name two Perrigo executives he said he hoped will continue with the combined company:  Judy L. Brown, Perrigo’s evp and CFO; and Todd W. Kingma, evp, general counsel, and secretary.

“We also envision important roles in the combined company for members of Marc Coucke's Omega Pharma management team,” Coury added. Couke founded Omega and was its CEO until Mylan bought the company from Coucke, Waterland Private Equity Investments and co-investors of Waterland for approximately €3.8 billion (about $4.1 billion) cash and stock, in a deal completed March 30.

Mylan offered Perrigo shareholders $205 per share in cash and Mylan stock for each Perrigo share. The offer is 25% above the closing price of Perrigo shares on Friday, more than 29% above Perrigo's 60-day average share price, and more than 28% over Perrigo's 90-day average share price.

The proposal is subject to due diligence, a condition Mylan said it could waive at its discretion, with no deadline for a response included in the letter.

The Perrigo deal would also be more than five times the $5.3 billion that Mylan paid last year for its previous biggest-ever deal, its acquisition of the outside-U.S. branded generic drug business of Abbott Laboratories. In return, Abbott took a short-term, roughly 21% stake in a new entity that was combined with Mylan, then re-domiciled in the Netherlands.

Mylan’s corporate headquarters is in Potters Bar, England, with an operating HQ in Canonsburg, PA. Perrigo likewise has a U.S. operating HQ in Allegan, MI, but is headquartered in Dublin; the company was re-domiciled in Ireland after acquiring Elan in 2013.

Mylan’s offer for Perrigo reflects how hot the market for biopharma mergers and acquisitions remains after the value of such deals zoomed to a record-high roughly $220 billion, with another $75 billion in M&A deals occurring during the first quarter, according to Bloomberg.

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