Pfizer to buy rival Wyeth for $68 billion

Bloomberg

Pfizer, based in New York, will acquire its smaller U.S. peer in a cash-and-stock transaction valued at $50.19 a share, which is 29 percent more than the closing price of $38.83 on Jan. 22, the day before talks on the deal were first reported, the companies said yesterday in a statement.

The purchase gains Pfizer the depression treatment Effexor and pneumonia vaccine Prevnar, raising Pfizer’s annual sales by 46 percent to about $70 billion. It will help Pfizer offset some of the $12 billion in revenue it begins losing in 2011 when the Lipitor cholesterol pill gets generic competition. It may also spur more consolidation in an industry buffeted by a thinning pipeline of new products and growing patent expirations.

The bold route
"Pfizer’s labs weren’t able to create enough drugs to replace the Lipitor revenue," said Les Funtleyder, an analyst with Miller Tabak & Co. in a Jan. 23 interview. "As that became more obvious, Pfizer felt like they had to do something. They could have decided to let Lipitor go away and become smaller. They are choosing the route of getting bigger."

Pfizer’s shares rose 24 cents, or 1.4 percent, to $17.45 on Jan. 23 when the deal was first reported by the Wall Street Journal. Wyeth withdrew from talks to acquire Dutch vaccines maker Crucell, the company said yesterday.