Pfizer Falls After Reaching $68B Deal With Wyeth

Updated from 11:21 a.m. EST

Pfizer(PFE Quote) said Monday it had reached a definitive agreement to acquire rival drugmaker Wyeth(WYE Quote) in a cash-and-stock transaction currently valued at $50.19 a share, or a total of about $68 billion.

The acquisition price is a 14.7% premium to Wyeth's closing stock price Friday of $43.74. Pfizer shares closed last week at $17.45, but they were falling 11.1% to $15.22 in morning trading Monday. Wyeth was down 0.9% to $43.37.

The boards of both companies approved the merger. Acquiring Wyeth helps Pfizer, already the world's biggest pharmaceuticals maker, diversify and become less-dependent on individual drugs, while adding strength in biotech drugs, vaccines and consumer products.

Analysis	Discussion	Stock Rating
Jim Cramer: The growth problem remains.	Just Say No Add comment	HOLD (Get Report)

"The combination of Pfizer and Wyeth provides a powerful opportunity to transform our industry," Pfizer Chairman and CEO Jeffery B. Kindler said in a statement. "It will produce the world's premier biopharmaceutical company whose distinct blend of diversification, flexibility, and scale positions it for success in a dynamic global health care environment."

The announcement from the companies confirms reports from The New York Times and The Wall Street Journal that Pfizer, the maker of Lipitor and Viagra, was working over the weekend to finish financing for the acquisition.

Dutch biopharmaceutical company Crucell(CRXL Quote), meanwhile, announced Monday that Wyeth has withdrawn from discussions regarding a potential combination of the two companies. It was reported earlier this month that Wyeth was in preliminary talks to acquire Crucell in a deal that valued Crucell at more than $1.35 billion.

Meanwhile, Pfizer reported a 90% decline in fourth-quarter net income. The company had net income of $266 million, or 4 cents a share, in the period ended Dec. 31, compared with earnings of $2.7 billion, or 40 cents a share, a year earlier. Earnings were hurt by a charge to resolve investigations into off-label promotional practices.