Pfizer to buy injectable drugmaker Hospira in $17-billion deal

Pfizer entered a definitive merger agreement to acquire Hospira for $90 per share in cash, or a total enterprise value of approximately $17 billion, the companies reported Thursday. The price represents a premium of 39 percent to Hospira stock's close on February 4. "The proposed acquisition of Hospira demonstrates our commitment to prudently deploy capital to create shareholder value," commented Pfizer CEO Ian Read.

The executive added that "Hospira's business aligns well with our new commercial structure and is an excellent strategic fit for our Global Established Pharmaceutical business, which will benefit from a significantly enhanced product portfolio in growing markets." Pfizer noted that the deal will add Hospira's generic sterile injectables product line, including acute care and oncology injectables, as well as its biosimilars portfolio, creating a leading global sterile injectables business."

Pfizer added that the combination also reinforces the strategy of its Global Established Pharmaceutical unit to create a broad portfolio of biosimilars in its therapeutic areas of strength, including a number already marketed by Hospira. According to Pfizer, it will use its resources "to significantly expand" the reach of Hospira's products, which it said are currently distributed mainly in the US, to Europe and key emerging markets.

The companies indicated that both boards of directors have unanimously approved the transaction, which is expected to close in the second half. Pfizer noted that the purchase is expected to be immediately accretive upon closing and add between $0.10 and $0.12 per share to earnings in the first full year after closing. Pfizer added that it expects the deal will deliver $800 million in annual cost savings by 2018.

The acquisition to buy Hospira is the first since Pfizer abandoned its attempt last year to take over AstraZeneca.

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