Pfizer, Warner-Lambert Reportedly Near Merger Deal

A deal will likely involve a sweetening of Pfizer's three-month-old bid.
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Pfizer

(PFE) - Get Report

and

Warner Lambert

(WLA)

are reportedly nearing a merger agreement, as the two drug makers hammer out a deal that will likely involve a sweetening of Pfizer's 3-month-old bid.

Although the companies are still trying to work out the exact price Pfizer would pay for Warner-Lambert, the companies could reach an agreement within a few days,

The Wall Street Journal

reported Wednesday.

New York-based Pfizer's original bid involved payment of 2.5 Pfizer shares for every Warner-Lambert share. Warner-Lambert reportedly wants that bid upped to three Pfizer shares.

If the companies were to meet halfway, around 2.7 to 2.8 Pfizer shares per Warner-Lambert share, the deal would be valued around $84.8 billion.

The renewal of talks between the companies comes about a week after

negotiations broke down for a three-way merger between

Procter & Gamble

(PG) - Get Report

, Warner-Lambert and

American Home Products

(AHP)

.

Last November, Morris Plains, N.J.-based Warner-Lambert and American Home Products agreed to merge. American Home Products would be owed a $1.8 billion breakup fee if the agreement falls through, but the company might demand more if Warner-Lambert wants to make a clean break to posititon itself to be acquired by Pfizer.

Pfizer closed trading Tuesday up 5/8 at 36 13/16 while Warner-Lambert finished up 1 5/8 to 95 5/8. (Pfizer closed down 1, or 2.7%, at 36. Warner Lambert closed down 3/4, or 0.78%, at 94 7/8.)