US drug manufacturer Pfizer Inc. will acquire rival Wyeth for 68 billion dollars, making it the largest pharmaceutical takeover deal in nearly a decade, the two companies announced early Monday. The acquisition will be financed through a combination of cash, debt and stock, and a consortium of banks has agreed to provide a total of 22.5 billion dollars to finance it.
Under the terms of the cash-and-stock transaction, each outstanding share of Wyeth common stock will be converted into a shareholder right to receive 33 in cash and 0.985 of a share of Pfizer common stock. The boards of directors of both companies have approved the merger.
"The combination of Pfizer and Wyeth provides a powerful opportunity to transform our industry," Jeffrey Kindler, chairman and chief executive officer of Pfizer said in a statement.
"It will produce the world's premier biopharmaceutical company whose distinct blend of diversification, flexibility, and scale positions it for success in a dynamic global health care environment." Wyeth president an CEO Bernard Poussot said that combining with Pfizer will accelerate the company's "pursuit of innovative new medicines to meet critical unmet patient needs." He argued that Wyeth and Pfizer were highly complementary businesses, and together they "can build the best diversified health care company in the world."
The deal appears to be the biggest takeover in the pharmaceutical sector since Pfizer acquired Warner-Lambert Co. for 93.4 billion dollars in 2000.
Participants said the new company will have more resources to invest in research and development than any other biopharmaceutical company and access to all leading scientific technology platforms, including vaccines, small and large molecules, nutritionals and consumer products.
The combined company will be number one in terms of biopharmaceutical revenues in the United States with a market share of about 12 percent.
It will hold about 10 percent of the market in Europe, seven percent in Asia with the exception of Japan, and six percent in Latin America.
Pfizer Inc, founded in 1849, employs about 81,900 people in more than 150 countries around the world. According to The Wall Street Journal, Pousso and his management team are not expected to remain with the company after the takeover.