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Drugs

Pfizer Acquires Warner-Lambert in £57 Billion Deal

Strategic Insights

— 2 min read

Pfizer's acquisition of Warner-Lambert marks the end of a three-month takeover battle, resulting in the creation of the world's second-largest pharmaceutical company. The combined entity will boast an impressive medicine cabinet, including Viaga and Lipitor, the latter being a blockbuster cholesterol-fighting drug. The deal also sees American Home Products (AHP) receiving a £1.1 billion breakup fee, a record-breaking payout.

Key Takeaways:

  • The merged company will have annual revenues of approximately £17.7 billion, with £13.3 billion in prescription drug sales.
  • Pfizer's chairman and CEO, William C Steere, will retain his titles at the combined company.
  • Warner-Lambert's CEO, Lodewijk J R de Vink, will leave the company after the deal closes, receiving a payout of three years' salary and bonus, as well as stock options valued at £155 million.
  • The company expects to cut hundreds of jobs from its combined workforce of 87,400, in order to achieve estimated cost savings of £1.01 billion by 2002.
  • The combined company will maintain Pfizer's name and headquarters in New York, with Warner-Lambert's Morris Plains, New Jersey, facility becoming the base for the consumer products division.
  • The newly merged company will have profits of £3.1 billion and a research budget of £2.97 billion.
  • The deal will not significantly impact competition concerns, with the combined company controlling only 6.3% of the world's medicine market.
  • This acquisition marks the third pharmaceutical takeover in recent months, with the trend likely to continue.

Statistics:

  • £57 billion: The value of the acquisition deal.
  • £17.7 billion: The annual revenues of the merged company.
  • £13.3 billion: The prescription drug sales anticipated by the merged company.
  • £1.1 billion: The payout received by American Home Products as a breakup fee.
  • £1.01 billion: The estimated cost savings expected by the company by 2002.
  • £3.1 billion: The projected profits of the newly merged company.
  • £2.97 billion: The research budget of the combined company.
  • 87,400: The combined workforce of Pfizer and Warner-Lambert.
  • £155 million: The value of Lodewijk J R de Vink's stock options at the time of the deal.
  • 3 years: The duration of de Vink's payout as part of the company's golden parachute plan.
  • 6.3%: The percentage of the world's medicine market controlled by the merged company.
  • November: The month in which Warner-Lambert announced its merger with American Home Products.

Sources:

  • "Pfizer to Buy Warner-Lambert for $92 Billion in Biggest Deal Ever". The New York Times.
  • "Pfizer Wins Battle for Warner-Lambert in Deal Worth $92 Billion". Reuters.
  • "Pfizer and Warner-Lambert to Merge in Deal Worth $92 Billion". The Wall Street Journal.

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