Pfizer to Acquire Pharmacia for $60 Billion

In a move designed to sustain its growth and expand its pipeline of new drugs, Pfizer Inc. (New York, NY, USA) has agreed to acquire Pharmacia Corp. (Peapack, NJ, USA) for US$60 billion in stock. If completed, the acquisition is expected to increase Pfizer's share of the pharmaceutical market to 11% worldwide, making it by far the largest drug company in the world, with projected sales of $48 million. The combined company is expected to have as many as 12 products with annual revenues greater than $1 billion each and an R&D pipeline containing nearly 120 new chemical entities in development.

Pfizer's current therapeutic portfolio includes drugs for depression, cholesterol lowering, and erectile dysfunction. The portfolio will be enhanced by Pharmacia's drugs for arthritis, growth-hormone deficiency, and cancer therapies. The transaction is expected to be approved by regulators since the two companies have only a few overlapping drugs. Industry analysts say the merger may speed continued consolidation in the pharmaceutical industry. It may, for example, put pressure on GlaxoSmithKline, the world's second largest drug company, to search for acquisitions to help it remain competitive.

Upon the closing of the transaction, Fred Hassan, chairman and CEO of Pharmacia will become vice chairman of Pfizer. Meanwhile, Pharmacia intends to proceed with its previously announced spinoff of its remaining 84% ownership of Monsanto to its current shareholders.

"This is an extraordinary opportunity to combine two of the fastest-growing and most innovative pharmaceutical companies and to position Pfizer for sustained long-term leadership of the global pharmaceutical industry,” said Hank McKinnell, chairman and CEO of Pfizer. "By combining with Pharmacia, we are ensuring that our core capabilities in the discovery, development, and commercialization of new medicines are strong around the world.”





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