by Andrew Lennon | Managing Editor | The Daily Anchor
UPDATE (1/26/09): The Pfizer / Wyeth merger has been finalized and sources are reporting Pfizer will layoff 50% of Sales Reps. Click here for full coverage.
Original Post:
The WSJ is reporting that Pfizer (NYSE: PFE) is in talks to takeover rival drug maker Wyeth (NYSE: WYE) in a deal valued at $60 billion. Analysts have been predicting and calling for such a merger for several years.
Pfizer and Wyeth have been talks for months, but that a deal is not imminent.
As recently as last week there was talk of Wyeth positioning itself to takeover Crucell, a Dutch producer of vaccines, a deal valued at around $1.35 billion. The Pfizer – Wyeth takeover is valued at around $60 billion.
Here’s a quick run down of facts and numbers as of 1/23:
I’ll be posting updates as they develop, so check back through the day.
- As of 2:00pm EST, sources now say that the deal has advanced, and while no agreement has been reached the merger may be announced in days.
- Last week Pfizer eliminated 800 global research positions, 556 sales positions in Italy, and 1,000 sales positions in France.
- Some analysts are saying that the Pfizer layoffs reflect a decision to “give up” on their own R&D team in order to accommodate Wyeth’s R&D staff in hopes of finding a new blockbuster drug.
- If a deal goes through, Wyeth is likely to face major layoffs.
- The takeover is valued at more than $60 billion
- Wyeth’s market value is around $52 billion
- Pfizer’s market value is around $116 billion
- Today Wyeth shares jumped $3.09, or 8 percent, to $41.92, while Pfizer fell 29 cents to $16.92.
- Pfizer’s major drugs = Lipitor, Lyrica, Celebrex, Chantix, Viagra
- Wyeth’s major drugs = Prevnar, Enbrel, Effexor, Premarin, Protonix
- Pundits have been marking Wyeth as a buyout target since 2007 and Credit Suisse analysts have been the most vocal proponents of the merger.
- Pfizer will report its Q4 earnings next week, and has said it expects 2008 revenue to match its 2007 revenue of $48 billion, but it expects substantial growth in 2008 earnings as a result of continuing global layoffs amounting to $2 billion in savings.
- The takeover comes as a high risk to Pfizer, who has faced turbulence with past takeovers.
- Industry analysts have criticized former Pfizer CEO Henry McKinnell for a leadership strategy that focused heavily on stock-for-stock mergers and acquisitions that diluted shareholder value.
- During McKinnell’s tenure from 2000-2006 Pfizer’s per share stock value fell from $50 to $30, reflecting a $140 billion loss.
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