Hazelwood, Mo. Mallinckrodt has agreed to merge with Exeter, N.H.-based Tyco International, officials of both companies said. Under the agreement, valued at $4.2 billion, Mallinckrodt shareholders would receive Tyco shares equivalent to $47.50 for each Mallinckrodt share.

"This transaction provides exceptional value for our shareholders and allows Mallinckrodt shareholders to participate in the future growth of Tyco," said Ray Holman, Mallinckrodt chairman and chief executive officer.

Mallinckrodt officials said the decision to merge was driven partly by their company's falling stock price.

"When we began this spring planning for the next fiscal year, one of the things that became apparent was that we really did need to look at a lot of strategic alternatives that the company might consider," said Barbara Abbett, Mallinckrodt's vice president of corporate communications. "And one of the things that was on that list was selling the company in its entirety to another strategic buyer."

Company officials also concluded that to succeed in the long term, Mallinckrodt needed to become part of a larger organization to create greater critical mass.

"There has been substantial consolidation in our industry in recent years, and we expect that to continue," Holman said. "We believe companies most likely to succeed will have higher sales, more leverage to operate globally and a larger basket of products to take to consolidated purchasers.

"That's why," he continues, "our board and management team are excited by the opportunities the combination with Tyco presents for both companies, our investors and our customers."

The agreement, which the boards of directors of both companies have approved, is contingent upon regulatory review and approval by Mallinckrodt shareholders. Mallinckrodt officials said they expect the deal to be completed by the end of September.

If the merger is completed, the company would become an operating unit of Tyco Healthcare with Holman continuingas Mallinckrodt's chairman and also becoming a Tyco senior vice president. The day-to-day leadership of Mallinckrodt, however, would shift to Rich Meelia, Tyco Healthcare's president and chief executive officer, Mallinckrodt officials indicated.

Mallinckrodt officials also said staff reductions are likely as the two companies attempt to streamline operations and ensure efficiency.

"There undoubtedly will be [job cuts]," Abbett said. "No one knows at this point what the extent of that will be or where those will take place. But usually, in these kinds of mergers or acquisitions, it is at your corporate staff or administrative level where those things are first identified." -R.P.

Lake Forest, Calif. The U.S. District Court for the Central District of California ordered Novacon to stop importing, manufacturing, selling and distributing the DIB elastomeric pump from Japan because it infringes on I-Flow's patent on its Homepump Eclipse, I-Flow officials said.

"I-Flow has invested substantial sums of money in developing the Homepump Eclipse and other cost-effective products for the pain management and infusion needs of patients," said Donald Earhart, I-Flow's chairman, president and chief executive officer. "We invested the resources necessary to develop the technology incorporated in these products and to patent the technology."

Indeed, he noted, "the ability to develop innovative technology is one of I-Flow's primary competitive advantages, and we will always vigorously defend our proprietary technology from infringement."