Monday, January 26, 2009

Pfizer buys Wyeth for $68-billion

From the Globe and Mail:
Pfizer Inc. is buying rival drug maker Wyeth in a $68-billion (U.S.) deal that will increase its revenue by 50 per cent, solidify its No. 1 rank in the troubled industry and transform it from a pure pharmaceutical company into a diversified health care giant.

At the same time, Pfizer announced cost cuts that include slashing more than 8,000 jobs as it prepares for an expected revenue crash when its cholesterol drug Lipitor — the world's top-selling medicine and source of one-quarter of Pfizer's revenue — loses patent protection in November, 2011.

There was no immediate word on whether the cuts would impact the company's Canadian operations, which employ more than 1,400 staff at facilities in Alberta, Ontario and Quebec.

The cash-and-stock deal, expected to close at the end of the third quarter or in the fourth quarter, comes as Pfizer's profit takes a brutal hit from a $2.3-billion legal settlement over allegations it marketed certain products for indications that have not been approved. The New York-based company is also cutting 10 per cent of its work force of 81,900, slashing its dividend, and reducing the number of manufacturing sites from 46 to 41. Those closures, and reducing its facilities square footage by about 15 per cent, will cost about $6-billion before taxes, of which $1.5-billion has been incurred, Pfizer said.

After the deal closes Pfizer expects to cut more jobs. The company said it expects eventually to cut the companies' combined work force by 15 per cent, a figure that the Pfizer cuts announced Monday. ...more

No comments: