March 12 (Reuters) - Mallinckrodt and Endo ( NDOI )

are exploring a potential merger that could be valued

at about $7 billion, person familiar with the matter told

Reuters on Wednesday.

A deal could likely be announced as soon as Thursday, the

person said. The two companies did not immediately respond to

Reuters requests for comment.

Both Mallinckrodt and Endo ( NDOI ) have in the recent years faced

lawsuits for their alleged role in the U.S. opioid epidemic.

While Mallinckrodt emerged from its second bankruptcy in

November 2023, Endo ( NDOI ) returned last year.

The drugmakers are discussing the terms of a transaction

that would give each of them roughly 50% ownership of the

combined entity, Bloomberg News, which first reported the deal,

said, adding the company is expected to be listed on the New

York Stock Exchange.

Mallinckrodt, which makes branded and generic drugs, first

filed for bankruptcy in 2020 due to its high debt, litigation

over its allegedly deceptive marketing of highly addictive

generic opioids and disputes over its drug pricing.

As part of its second restructuring, the company was able to

trim $1 billion from its previously agreed opioid settlement,

that resolved about 3,000 lawsuits.

Endo ( NDOI ) used to manufacture and sell a long-acting opioid

painkiller called Opana ER, which was withdrawn in 2017 after

the U.S. FDA said its benefit did not outweigh public health

risks associated with opioid abuse.

The drugmaker, which began its bankruptcy process in 2022,

agreed to pay about $600 million in settlements to states and

people afflicted by the opioid crisis and to stop promoting

opioids to prescribers.

(Reporting by Anirban Sen in New York and Bhanvi Satija, Sneha

S K in Bengaluru ; Editing by Arun Koyyur)