By Lisa Kerner
Charlotte, N.C., Jan. 26 - Pharmaceutical giants Pfizer Inc. and Wyeth agreed to combine in a cash-and-stock deal currently valued at $50.19 per share, or a total of approximately $68 billion, it was announced on Monday.
Each outstanding share of Wyeth common stock will be converted into the right to receive $33.00 in cash and 0.985 of a share of Pfizer common stock.
The stock component is currently valued at $17.19 per share, Pfizer said.
Pfizer plans to finance the transaction using a combination of cash, debt and stock. The company said it has bank commitments for $22.5 billion in debt.
Both companies expect to close the transaction at the end of the third quarter or during the fourth quarter of 2009.
The combination gives Pfizer access to Wyeth's Grange Castle, Ireland, facility, the largest integrated biotechnology manufacturing facility in the world, and provides additional resources for research and development, a Pfizer news release said.
According to New York-based Pfizer, the combined company will have a 12% share of the U.S. biopharmaceutical market, making it No. 1 in terms of revenues.
The transaction is expected to be accretive to Pfizer's adjusted diluted earnings per share in the second full year after closing.
In connection with the proposed merger, Pfizer will reduce its quarterly dividend to $0.16 per share, effective with the dividend to be paid in the second quarter of 2009.
"We believe we can better execute our strategy and can accomplish far more together in the years ahead than either company could have achieved on its own," Wyeth chairman, president and chief executive officer Bernard Poussot said in a company news release.
Wyeth said it has withdrawn from discussions regarding a possible combination with Dutch biopharmaceutical company Crucell NV.
Bank of America, Merrill Lynch, Goldman Sachs and J.P. Morgan, along with Barclays and Citigroup, are advising Pfizer.
Madison, N.J.-based Wyeth is being advised by Morgan Stanley and Evercore Partners.
| Acquirer: | Pfizer Inc.
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| Target: | Wyeth
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| Announcement date: | Jan. 26
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| Transaction total: | $68 billion
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| Price per share: | $33.00 in cash and 0.985 of a Pfizer share
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| Expected closing: | End of the third quarter or during the fourth quarter of 2009
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| Stock price for acquirer: | NYSE: PFE: $17.45 on Jan. 23
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| Stock price for target: | NYSE: WYE: $43.74 on Jan. 23
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