Merck Won't Yield on Yield
When the diet-drug lawsuits started, "we didn't have a sense of how much it
By the end of 1999, when Wyeth set aside the first reserve of $4.75 billion, Martin says executives "didn't feel comfortable" about the potential impact of lawsuits on the dividend and the company's ability to meet research, development and capital investment goals. "Each year, we had to reassess," he adds.
But Wyeth was aided by strong operating results and some good timing. The company, then known as American Home Products, got a $1.8 billion breakup fee when Pfizer (PFE) outbid it for Warner-Lambert in 2000. Also that year, Wyeth sold its agricultural chemicals business to Germany's BASF (BF) for nearly $4 billion.
A year later, Wyeth benefited when Amgen (AMGN) made a $16 billion bid for the biotechnology firm Immunex, in which Wyeth owned a 41% stake."If those
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