Durham-based life science services giant Quintiles (NYSE: Q) is merging with IMS Health Holdings (NYSE: IMS) in a deal announced early Tuesday.

The two companies would be worth some $17.6 billion. It will be called Quintiles IMS. They have been working together as partners since last fall and according to the firm’s top executives already have made several deals.

Early Quintiles investor reaction was negative, however. Quintiles shares dropped 7.4 percent at the market open, or $5.15, to $63.95. In afternoon trading, shares were still down 7 percent, or $5.10.

Shares did rally by day’s end, closing at $67.46, a drop of $1.64 or 2.8 percent. Investors traded 9.2 million shares – nearly 10 times the daily average.

Once the deal is closed, IMS Health shareholders will own more than 51 percent of the company. IMS Health shareholders are to receive 0.384 shares of Quintiles stock for each share of IMS stock. IMS shares closed at $26.64 Monday. Quintiles closed at $68.09.

More coverage

  • WRAL TechWire’s report on how the Quintiles-IMS merger came about.
  • Exclusive analysis: Deal could trigger more; why Street doesn’t like Q-IMS merger.
  • Exclusive Q&A: )What’s the local impact? Why do the deal

Tom Pike, the CEO of Quintiles, will become vice chairman of the combined company.

The deal is the latest in the pharmaceutical and life science industry. Burlington-based LabCorp last year acquired Covance in a multi-billion-dollar deal and is rumored to be considering a deal for Raleigh-based INC Research. Like Quintiles, INC is primarily a contract research organization focused on providing clinical trial testing and related services for new drugs.

Following the LabCorp-Convance deal, Quintiles formed a joint venture with Quest, a lab testing company.

IMS and Quintiles expect the deal to close in the second half of this year, pending regulatory approval. Stock will trade on the NYSE under the “Q” symbol.

No immediate impact is expected on Quintiles operations, a company spokesperson said. Quintiles has some 2,900 employees in Durham and more than 3,000 across the state.

The firms said they plan to maintain dual headquarters in Durham and Danbury, Connecticut where IMS Health is based.

IMS is a global provider of information and technology services for the healthcare industry.

Quintiles, which launched in Chapel Hill in 1982, focuses on clinical trials and related services.

According to the companies, the merger will “create one of the world’s largest portfolios of healthcare information, deep therapeutic, domain, regulatory and commercial analytic expertise, as well as proprietary technology applications supported by more than 50,000 employees operating in 100+ countries.”

Once merged, the firms said they eventually expect to save $100 million per year in expenses. The deal is seen as having a positive impact on earnings next year.

In 2015, the two firms produced more than $7 billion in revenue.

The combined board will feature 12 directors – six from each company – but the lead director will be Quintiles founder Dennis Gillings.IMS is worth slightly more in stock market cap at $8.86 billion, based on the closing price of shares on Monday.

Quintiles’ market cap as of Monday’s close was $8.26 billion.

“This combination addresses life-science companies’ most pressing needs: to transform the clinical development of innovative medicines, demonstrate the value of these medicines in the real world, and drive commercial success,” Pike said in a statement. “We are bringing together two best-in-class leaders. I’m confident that together we will make our clients even more successful.”

Ari Bousbib, chairman and chief executive officer of IMS Health, will be the chair and CEO of the combined company.

“Together our solutions will enable differentiation in the CRO market, advance Real-World Evidence capabilities, and deliver comprehensive commercial solutions for our clients,” Bousbib said in the announcement.

“This powerful combination brings together leading technology and analytics with deep scientific expertise delivered on a global scale by our 50,000 immensely talented professionals in more than 100 markets. Our combined business will accelerate growth, yield greater operating efficiencies and provide more flexibility for future expansion.”

Spelling out a “Strategic Rationale” for the deal, the companies said in a joint statement the merger would:

  • Improve clinical trial design, recruitment and execution in the $100 billion bio-pharma product development market by combining IMS Health’s rich, global information solutions with Quintiles’ industry-leading product development skills.
  • Create a distinctive global Real-World Evidence solutions platform by combining a leading portfolio of anonymous patient records, technology-enabled data collection and observational research experts to address critical healthcare issues of cost, value and patient outcomes.
  • Further differentiate commercial analytics and outsourcing services to support the efficiency of life sciences’ commercial organizations.

The companies announced the deal at about the same time they also disclosed their latest quarterly earnings.

Quintiles reported earnings of $106.7 million, or 89 cents per share vs. Wall Street expectations of 86 cents.

Revenue came in slightly under expectations at $1.11 billion. Analysts expected $1.12 billion.