updated 3/21/2005 8:17:57 AM ET 2005-03-21T13:17:57

Prescription skin medication maker Medicis Pharmaceutical Corp. said Monday it agreed to purchase Inamed Corp., a maker of breast implants and obesity treatments, for about $2.8 billion in cash and stock.

The deal will create a company with annual revenue of more than $700 million, operations in more than 12 countries and about 1,500 employees.

Medicis, based in Scottsdale, Ariz., posted 2004 sales of $303.7 million, and Santa Barbara, Calif.-based Inamed reported revenue of $384.4 million.

Under terms of the transaction, which has been approved by both companies' boards of directors, Inamed stockholders will receive 1.4205 shares of Medicis stock and $30 in cash for each Inamed common share held. That works out to about $75 a share, or a 13 percent premium over Inamed's share price as of Friday's close.

Medicis Chairman and CEO Jonah Shacknai will be chairman and CEO of the combined company and Nick Teti _ Inamed chairman, president and CEO _ will assume the position of vice chairman. In addition to Teti, three additional Inamed representatives will join the current eight-member Medicis board.

While the company will be based in Scottsdale, Medicis said it will retain a strong presence in Santa Barbara and Fremont, Calif. and international locations, including Arklow, Ireland and San Jose, Costa Rica.

The transaction is subject to the approval of Medicis and Inamed stockholders, regulatory approvals and customary closing conditions. The companies expect the transaction to close by the end of calendar 2005.

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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