Pfizer to Acquire Rival Wyeth for $68 Billion

Will cut 10% of global workforce and reduce manufacturing sites to 41 from 46

Making it the largest pharmaceutical takeover deal in nearly a decade, Pfizer Inc. will acquire rival Wyeth for $68 billion, the two companies announced on Jan. 26.

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 to finance it. 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 combination of Pfizer and Wyeth provides a powerful opportunity to transform our industry. 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," said Jeffrey Kindler, CEO, Pfizer.

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."

The New York-based firm said it would be cutting its global workforce by around 10%, eliminating jobs in sales, manufacturing, research and development, and administration. It will also reduce the number of manufacturing sites to 41 from 46.

The deal appears to be the biggest takeover in the pharmaceutical sector since Pfizer acquired Warner-Lambert Co. for $93.4 billion 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 U.S. with a market share of about 12%. It will hold about 10% of the market in Europe, 7% in Asia with the exception of Japan and 6% in Latin America.

Pfizer Inc, founded in 1849, employs about 81,900 people in more than 150 countries around the world.

Copyright Agence France-Presse, 2009

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