Pfier Wyeth M&A Transaction Analysis

8308 words - 34 pages

Executive Summary:
Pfizer-Wyeth Merger Deal Overview:
On January 25, 2009, Pfizer and Wyeth entered into the merger agreement, pursuant to which, subject to the terms and conditions set forth in the merger agreement, Wyeth will become a wholly-owned subsidiary of Pfizer. Upon completion of the merger, each share of Wyeth common stock issued and outstanding will be converted into the right to receive, subject to adjustment under limited circumstances, a combination of $33.00 in cash, without interest, and 0.985 of a share of Pfizer common stock in a taxable transaction. Pfizer will not issue more than 19.9% of its outstanding common stock at the acquisition date in connection with the ...view middle of the document...

Acceleration of Growth in emerging markets
4. Creation new opportunities for established products
5. Creation of a low, more flexible cost base

Pfizer-Wyeth Merger Analysis

Pfizer History:
Pfizer Inc. is one of the leading research-based healthcare companies in the world. Following its June 2000 takeover of Warner-Lambert Company, Pfizer was organized into four groups: Pfizer Pharmaceuticals Group, Warner-Lambert Consumer Group, Pfizer Animal Health Group, and Pfizer Global Research and Development. Among the prescription drugs marketed by Pfizer Pharmaceuticals with annual revenues exceeding $1 billion are Norvasc, for the treatment of hypertension and angina; Lipitor, a cholesterol reducer; Zoloft, an antidepressant; Zithromax, an oral antibiotic; Diflucan, an antifungal product; and Viagra, the famous treatment for erectile dysfunction. Warner-Lambert Consumer markets a number of leading consumer brands, including such over-the-counter healthcare mainstays as Benadryl, Sudafed, Listerine, Visine, Rolaids, and Ben Gay; in the confectionery area, Trident, Dentyne, Certs, and Halls; Schick and Wilkinson Sword shaving products; and Tetra fish food. Pfizer Animal Health is a world leader in medicines for pets and livestock. On the development side, Pfizer Global R & D spends $4.5 billion a year shepherding candidates through the product pipeline, which at any one time can include more than 130 possible new products. R & D efforts also are aided by the 250 alliances that Pfizer has formed with academia and industry.
Pfizer SWOT Analysis:
Pfizer has extended its leadership position by acquiring its rival Wyeth for $68 billion. The company's large commercial infrastructure has positioned it as a marketing partner of choice. However, the blockbuster portfolio’s high level exposure to generic competition could significantly affect the company’s sales growth in future.
Strengths:
Blockbuster credentials remain strong (Lyrica, Sutent and Chantix/Champix)

Pfizer has launched a number of very successful products in recent years that are forecast to contribute significant levels of revenue growth over 2008–14. Chief among these is Lyrica (pregabalin), which is established as the market leading therapy in neuropathic pain and fibromyalgia and is forecast to contribute a change in sales of +$2.8 billion over 2008–14. Sutent (sunitinib)—primarily indicated for renal cell carcinoma (RCC)—has also recorded impressive sales growth since its launch in 2006 with 2008 global revenues recorded at $847 million. Sutent is forecast to contribute a change in sales of +$1.3 billion over 2008–14. The launch of Chantix/Champix has also provided a notable boost in revenue, by virtue of rapidly assuming market leading share in the prescription smoking cessation market; 2008 global revenues stood at $846 and are forecast to increase to $1,884 million by 2014.

Industry-leading sales & marketing infrastructure – Pfizer remains ‘marketing partner of choice’
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