Salix Pharmaceuticals and Santarus, two gastrointestinal specialty drug makers, are merging in an all cash deal valued at $2.6 billion.

Under the agreement, Salix will pay $32 per share for all the outstanding shares of Santarus, representing a 36 percent premium to Santarus’ closing price before the deal was announced.  

While both companies are focused on treating GI disorders, their portfolios are complementary, with no overlap in marketed products. Salix says the deal will solidify its position as a leader in the gastrointestinal drug market and give it a diversified portfolio of 22 marketed products. The deal also leverages Santarus’ sales team to expand Salix’s GI products into primary care, not currently a target of its sales effort.

The deal is in line with Salix’s strategy of in-licensing late-stage or marketed products, to commercialize and market them through its gastroenterology specialty sales and marketing team. Santarus’ portfolio includes the recently launched ulcerative colitis drug Uceris, the combination antacid Zegerid, a cholesterol drug and a couple of diabetes drugs. Santarus’ investigational biologic, Ruconest, a recombinant human C1 esterase inhibitor to treat acute angioedema attacks in patients with hereditary angioedema, has been approved in Europe and is under U.S. regulatory review with a decision expected in April 2014. 

The boards of both companies have approved the deal, which is expected to close in the first quarter of 2014.  In connection with the merger agreement, Salix will return Santarus’ rights to a late-stage treatment for travelers’ diarrhea to Cosmo Technologies.

Santarus’ shares jumped 37.6 percent after the deal was announced to close at $31.95 per share, while Salix’s shares rose 17.8 percent to close at $84 per share.