It's a $68 billion cash-and-stock deal, with Wyeth shareholders getting $50.19 a share - $33 in cash and 0.985 a share in Pfizer stock. That's 29 percent above where the stock closed last Thursday before the WSJ reported a deal was in the works.
The big question is this: Does this deal get Pfizer out of a tough spot as its blockbuster Lipitor goes off-patent? Chief Executive Jeff Kindler says yes, calling the deal a way to "definitively" address the threat from an end to Lipitor's exclusivity set for 2011. By 2012, he said no single drug will represent more than 10 percent of the combined company's sales.
That doesn't mean the drugmaker isn't struggling. Pfizer announced it would cut 15 percent of its combined workforce, slashed its dividend, and said it will borrow $22.5 billion to finance the deal (that's partially good news, since at least somebody is getting a loan). Pfizer shares slumped more than 8 percent in early trade, though the deal seemed to cheer broader markets hungry for any sort of dealmaking.
Reader Comments