CREATING THE WORLD’S PREMIER BIOPHARMACEUTICAL COMPANY
Diversification, Flexibility and Scale Position New Company for Success in Dynamic Global Health Care Environment
Establishes Leadership in Human, Animal, and Consumer Health, including Primary and Specialty Care; in Vaccines, Biologics and Small Molecules; and Across Developed and Emerging Markets
Unique and Flexible Business Model Features Focus and Agility of Smaller Enterprises Backed by Resources and Scale of Global Company
Combination Strengthens Platform for Improved, Consistent, and Stable Earnings Growth and Sustainable Shareholder Value
New Company Will Promote Health and Wellness and Respond More Effectively to Unmet Needs of Patients, Physicians, and Customers Around the World
NEW YORK, NY and MADISON, NJ--January 26, 2009 – Pfizer (NYSE: PFE) and Wyeth (NYSE: WYE) today announced that they have entered into a definitive merger agreement under which Pfizer will acquire Wyeth in a cash-and-stock transaction currently valued at $50.19 per share, or a total of approximately $68 billion. The Boards of Directors of both companies have approved the combination.
The combined company will create one of the most diversified companies in the global health care industry. Operating through patient-centric businesses that match the speed and agility of small, focused enterprises with the benefits of a global organization’s scale and resources, the company will respond more quickly and effectively to meet changing health care needs. The combined company will have product offerings in numerous growing therapeutic areas, a strong product pipeline, leading scientific and manufacturing capabilities, and a premier global footprint in health care.
With its broad and diversified global product portfolio and reduced dependence on small molecules, the new company will be positioned for improved, consistent, and stable top-line and EPS growth and sustainable shareholder value in the short and long term. It is expected that no drug will account for more than 10 percent of the combined company’s revenue in 2012. Financial Highlights
Under the terms of the transaction, each outstanding share of Wyeth common stock will be converted into the right to receive $33 in cash and 0.985 of a share of Pfizer common stock, subject to the terms of the merger agreement. Based on the closing price of Pfizer stock as of January 23, 2009, the stock component is valued at $17.19 per share. The transaction provides -1-
immediate value to Wyeth shareholders through the cash component, as well as continued participation in the future prospects expected to result from the combination through their ownership of approximately 16 percent of Pfizer’s shares.
The deal is expected to be accretive to Pfizer’s adjusted diluted earnings per share in the second full year after closing(1). The transaction is anticipated to yield cost savings of approximately $4 billion to be fully realized by the third year after closing. Savings are expected in selling, informational and administrative functions, research and development, and manufacturing.
The transaction will be financed through a combination of cash, debt and stock. A consortium of banks has provided commitments for a total of $22.5 billion in debt. In connection with the proposed transaction between Pfizer and Wyeth, the Board of Directors of Pfizer has determined that, effective with the dividend to be paid in the second quarter of 2009, it will reduce Pfizer’s quarterly dividend per share to $0.16, which continues to be competitive with other industry participants. Pfizer believes the transaction offers significant opportunities to enhance long-term shareholder value.
Jeffrey B. Kindler, Chairman and Chief Executive Officer of Pfizer, said: “The combination of Pfizer and Wyeth provides a powerful opportunity to transform our industry. It will produce the world’s premier biopharmaceutical...