American Home, Warner-Lambert Set $72 Billion Merger Deal

Now that American Home Products (AHP Quote) and Warner-Lambert (WLA Quote) have agreed to a $72 billion merger, the questions remains: Can they pull it off?

The merger will create a company -- to be named AmericanWarner -- with pro forma sales of $26 billion and a $3 billion research-and-development budget. The R&D budget would be one of the industry's largest, which is crucial for companies trying to keep earnings growing even as they invest heavily on complex drugs to treat maladies such as cancer and AIDS.

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Any skepticism over the deal, which was announced early Thursday morning after reports broke Wednesday, stems from American Home's failure over the last two years to close a pair of widely discussed deals. ...