Merck & Co. (NYSE:MRK) announced Monday that it will acquire Idenix Pharmaceuticals (NASDAQ:IDIX) for $3.85 billion, to establish a stronger foothold in the market for hepatitis C drugs.

New Jersey-based vaccine maker Merck said that it will pay $24.50 a share in cash, which is 3.4 times the value of Idenix stock, which closed at $7.23 on Friday. The deal will allow the $169 billion company to add an Idenix product to two of its own hepatitis C drugs, and help move the drugs to market within the next two years and directly compete with Gilead Sciences (NASDAQ:GILD), which makes Sovaldi, the current leader in hepatitis C treatment, and has been accused of patent infringement by Idenix and Merck separately.

"Idenix has established a promising portfolio of hepatitis C candidates," Roger Perlmutter, president of Merck Research Laboratories said, in a company statement released Monday, adding: "Idenix's investigational hepatitis C candidates complement our promising therapies in development and will help advance our work to develop a highly effective, once-daily, all oral, ribavirin-free, pan-genotypic regimen that has a duration of treatment as short as possible for millions of patients in need around the world."

The deal is expected to close in the third quarter and help reduce the treatment period for hepatitis C to between eight to 12 weeks, down from the current year-long treatment regimen. More than 150 million people worldwide suffer from hepatitis C, for which no vaccine is currently available, while three million Americans suffer from the disease, which primarily affects the liver.

Last year, Merck announced that it is conducting third-stage clinical trials for two of its mixed drugs for hepatitis C, and is trying to get them to market in the next two years. And, access to the Idenix drug will reportedly allow Merck to devise a treatment that will keep different versions of the virus in check for more than four weeks, and limit dosage to once a day, Perlmutter told the New York Times's DealBook blog.

“My belief is that a three-drug regimen will work even faster,” Perlmutter said, according to the Times, adding: “We are betting, I’m betting, that through this transaction we will be able to demonstrate superiority to any other regimen.”

Last week, German pharmaceuticals major Bayer decided to buy Merck's consumer care business for $14.2 billion and expects to close the transaction by the end of this year. Merck, which stands to lose exclusivity on a number of its patents, eliminated 8,500 jobs last October.

While Massachusetts-based Idenix's shares were up 229.05 percent in after-hours trading on NASDAQ on Monday, Merck’s stock ended almost flat, ending 0.16 percent up, in trading on the New York Stock Exchange.