The world’s largest maker of generic drugs is expanding once again. Teva has agreed to pay $66.50, or a total of $7.46 billion plus the assumption of net debt of approximately $1.5 billion. The share price is 42 percent higher than on Wednesday, before the talks became known. Besides generics, Barr sells the morning after pill.

The deal enhances Teva’s position in the US and Europe, where Barr itself exanded significantly two years ago with a $2.5 billion acquisition of Pliva, a Croation drugmaker. The deal will “enhance our market share and leadership position in the U.S. and key global markets, further strengthen our portfolio and pipeline, and provide upside to our strategic plan, by allowing us to exceed our 20/20 goals for 2012,” says Shlomo Yanai, Teva’s ceo, in a statement.

The deal also reflects the ongoing growth and consolidation in the generic-drug industry as governments, consumers and insurers increasingly turn to copycat meds to lower health care costs. Generics, by the way, now account for two-thirds of all meds sold in the US, which has spurred the recent spate of acqusitions. Earlier this year, Teva paid $400 million to buy CoGenesys and is expected to close soon on a deal to purchase Bentley Pharmaceuticals for about $350 million.

The combined company will have over 500 currently marketed products; more than 200 Abbreviated New Drug Applications pending with the FDA with annual brand sales of greater than $120 billion, including approximately 70 first to file Paragraph IV challenges; and approximately 3,700 product registrations pending with various regulatory authorities worldwide, primarily in Europe, according to the statement.

The transaction also bolsters Teva’s aspiration to grow its branded business by adding Barr’s portfolio of women’s healths meds, to Teva’s respiratory line-up. Teva anticipates the deal will yield at least $300 million in annual cost savings within 3 years and will continue to provide additional cost savings well beyond 2011.