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Pfizer acquires Wyeth for $68bn Pfizer acquires Wyeth for $68bn
(20 minutes later)
US drugmaker Pfizer it to buy rival Wyeth in a deal worth $68bn (£50bn), the two companies have announced.US drugmaker Pfizer it to buy rival Wyeth in a deal worth $68bn (£50bn), the two companies have announced.
"The merger will be financed through a combination of cash, debt and stock," the companies said.
The merger will allow Pfizer to protect itself from a drop in revenues when its popular drug Lipitor and other products lose patent protection.The merger will allow Pfizer to protect itself from a drop in revenues when its popular drug Lipitor and other products lose patent protection.
It will also help Pfizer diversify its product portfolio, thanks to Wyeth's presence in biotech drugs and vaccines.It will also help Pfizer diversify its product portfolio, thanks to Wyeth's presence in biotech drugs and vaccines.
It will be the largest merger in the pharmaceutical industry since Pfizer bought Warner-Lambert for $93.4bn in 2000, according to the Wall Street Journal. Pfizer, the world's biggest drugs firm, also makes Viagra, while Wyeth produces antidepressant Effexor XR.
With our combined biopharmaceuticals business, it [the combined company] will lead in primary and specialty care as well as in small and large molecules Jeffrey Kindler, Pfizer chief executive
Pfizer has raised $22.5bn from banks to finance the deal and said it will cut dividends "in connection with the proposed transaction between Pfizer acquires Wyeth".
"The merger will be financed through a combination of cash, debt and stock," the companies said.
"With our combined biopharmaceuticals business, it [the combined company] will lead in primary and specialty care as well as in small and large molecules," said Jeffrey Kindler, chairman and chief executive of Pfizer.
It is thought to be the largest merger in the pharmaceutical industry since Pfizer bought Warner-Lambert for $93.4bn in 2000.
Three years later, Pfizer also bought Pharmacia for $60bn.Three years later, Pfizer also bought Pharmacia for $60bn.
Earlier on Monday, Wyeth withdrew from talks to acquire Dutch biotechnology firm Crucell. Earlier on Monday, it was reported that Wyeth had withdrawn from talks to acquire Dutch biotechnology firm Crucell.
Diversification and cost-cuttingDiversification and cost-cutting
This sector must consolidate now, and Pfizer is the poster child David Moskowitz, Caris & Co From 2011, the Pfizer is expected to lose billions of dollars in sales to cheaper rival generics of its cholesterol treatment Lipitor.
Pfizer makes drugs including cholesterol treatment Lipitor, one of the best-selling drugs in the world, and Viagra. Deals of this quality and this magnitude will rekindle enthusiasm and hope about equity markets Andre Bakhos, Princeton Financial Group
From 2011, the firm is expected to lose billions of dollars in sales to cheaper rival generics of Lipitor. Wyeth faces the same problem next year, as it will lose patent protection on its best-selling Effexor XR.
Wyeth faces the same problem next year, as it will lose patent protection on its best-selling drug, antidepressant Effexor XR.
Wyeth also makes the popular Prevnar vaccine against childhood infections and rheumatoid arthritis treatment Enbrel.Wyeth also makes the popular Prevnar vaccine against childhood infections and rheumatoid arthritis treatment Enbrel.
The deal will also allow the two companies to cut cost by cutting jobs in overlapping areas.The deal will also allow the two companies to cut cost by cutting jobs in overlapping areas.
"Consolidation is a necessary evil in Big Pharma. This sector must consolidate now, and Pfizer is the poster child," said pharmaceutical analyst David Moskowitz at Caris & Co, before the announcement. "Deals of this quality and this magnitude will rekindle enthusiasm and hope about equity markets," said Andre Bakhos, Princeton Financial Group president.
"In the midst of a global recession, here is Pfizer, hopefully spending their dollars wisely."