The deal comes as drugmakers look to beef up their hepatitis C drug offerings to better compete with Gilead Sciences, which has captured the hepatitis C drugs market with its treatment, Sovaldi.
Cambridge, Massachusetts-based Idenix, which focuses on the treatment of human viral diseases, has three drugs in development to treat hepatitis C.
An estimated 3.2 million people in the United States are living with chronic hepatitis C infection, with most being unaware of the infection and showing no symptoms, according to the U.S. Centers for Disease Control and Prevention.
Sovaldi, which costs about $84,000 a year per patient, generated $2.3 billion in sales in the first few months on the market.
Idenix's experimental drug, IDX21437, in combination with Merck's two experimental drugs, MK-5172 and MK-8742, has the potential to cure patients with every genotype of the hepatitis C virus within four-six weeks, Merck's research chief Roger Perlmutter told Reuters on Monday.
Without the Idenix drug, the two Merck drugs cured a "high nineties" percentage of patients after 12 weeks of treatment, he said.
Merck said it would pay $24.50 per share, which is more than three times Idenix's Friday closing price of $7.23.
The companies said they expected the transaction to close in the third quarter.
Idenix said in March it was involved in a patent dispute with Gilead related to its hepatitis C treatment in Oslo, Norway.
Credit Suisse acted as the financial adviser to Merck, while Hughes Hubbard & Reed was its legal adviser.
Centerview Partners was Idenix's financial adviser and Sullivan & Cromwell acted as its legal adviser.
Idenix's shares soared almost 240 percent to $24.35 in premarket trading on Monday. (Click here for the latest quote.) Shares of Achillion Pharmaceuticals, another maker of hepatitis C drugs, jumped nearly 30 percent. (Click here for the latest quote.)
Merck's shares were down slightly in light trading before the bell. (Click here for the latest quote.)