Athlone-based pharmaceutical company Elan is selling its Westmeath unit to US biotechnology firm Alkermes.
It is understood Elan will be retaining a 25% share in the business, which employs 400 staff in Athlone.
The new business will be known as Alkermes PLC, and represents a merger between the Elan Drug Technologies (EDT) business of Elan and Alkermes .
Local Fine Gael TD Nicky McFadden told Midlands 103 that the news come as a shock, but that staff had been given assurances by Elan management that their jobs are safe.
"It must be shattering news this morning for the workers to hear this...My intention is to get on to Government to ensure that the jobs are safe," she said.
The total value of the deal between Elan and Alkermes is about $960m (€667m), with Elan to receive $500m (€347m) cash and 25% equity stake in Alkermes plc.
Elan has said it intends to use the cash generated from the deal to reduce its level of debt.