, looking past recent share weakness for an opportunity to bolster both its existing and future drug arsenal, has agreed to buy
for $60 billion in stock.
Pfizer is already the world's biggest drug company. The acquisition will create a company with $48 billion of revenue and two of the drug industry's marquee treatments: Pfizer's Lipitor cholesterol reducer and Pharmacia's Celebrex arthritis treatment.
The two companies' shares were both above $40 in April but had since moved to the low $30s. Pfizer shareholders will own about 77% of the combined company, with Pharmacia shareholders owning around 23%. The deal is expected to close by the end of 2002, subject to approval by shareholders of both companies and regulators. The deal won't dilute Pfizer's 2003 adjusted net income, according to the company, and will add about 6 cents a share to earnings in 2004.
Pharmacia will complete its planned spinoff of its 84% stake in
. After that, Pharmacia shareholders will receive 1.4 shares of Pfizer stock for each share of Pharmacia, for an implied value of $45.08 a share -- a 36% premium over Pharmacia's Friday closing price.
Pfizer CEO Henry McKinnell, 59, will be chief executive and chairman of the combined company, while Pharmacia CEO Fred Hassan, 56, will become vice chairman of Pfizer and a member of the board.