Pfizer, Warner-Lambert agree to merge

Pfizer Inc., New York, and Warner-Lambert Co., Morris Plains, NJ, announced they have entered into a definitive merger agreement. The combined company will have annual revenues of approximately $28 billion, including $21 billion in prescription pharmaceutical sales.

"By combining two world-class organizations to create the fastest-growing, major pharmaceutical company in the world, we are positioned for global leadership in the discovery of new medicines that will benefit millions of patients around the world," said William C. Steere, Jr., chairman and chief executive officer of Pfizer.

Originally, Warner-Lambert had planned to join with American Home Products, Madison, NJ, (see Pharmaceutical Representative, Jan. 2000), but due to Warner-Lambert's decision to merge with Pfizer, that agreement has been terminated. To compensate them, Warner-Lambert is paying American Home Products a $1.8 billion "break-up" fee.

"The unwavering goal of our Board of Directors has been to secure the best possible transaction for Warner-Lambert shareholders and the current Pfizer merger terms achieve that goal," said Lodewijk J.R. de Vink, Warner-Lambert's chairman, president and chief executive officer. "Our two organizations, having worked together for several years to achieve the unprecedented success of Lipitor, will bring the same energy and intensity to achieving the most rapid and seamless integration of the two companies."

Lipitor has been co-promoted by Warner-Lambert and Pfizer since 1996. This year, Lipitor is expected to exceed $5 billion in worldwide sales and a spring introduction is planned in Japan.

"Through our Lipitor partnership, we've gained a deep appreciation for Warner-Lambert's commitment to quality and innovation in healthcare. Our conviction that Warner-Lambert is the right partner for us has only been strengthened as we have explored the complementary nature of our companies," said Dr. Henry McKinnell, president and chief operating officer of Pfizer.

De Vink will remain chairman and CEO of Warner-Lambert until closing. He has made a personal decision not to be an executive in the company after the closing.

The combined research and development operations of the company, headed by Pfizer Vice Chairman Dr. John F. Niblack, will have a worldwide scientific staff of over 12,000 and $4.7 billion in annual R&D expenditures in 2000.

Corporate headquarters of the combined company will remain in New York, but the Warner-Lambert Consumer Health Care Division, along with the other consumer businesses and selected additional functions, will be located at Warner-Lambert's offices in Morris Plains, NJ. The worldwide and U.S. pharmaceutical division headquarters will be in New York with operational support functions in both New York and Morris Plains. The transaction, which is expected to close in mid-2000, is subject to customary conditions, including the use of pooling-of-interests accounting, shareholder approval at both companies and governmental and regulatory approvals.

Beside the breakup fee payment, all litigation among American Home Products, Warner-Lambert and Pfizer has been discontinued and American Home Products' option to purchase Warner-Lambert shares has been rescinded. PR