February 5, 2015
By Mark Terry, BioSpace.com Breaking News Staff
New York-based Pfizer Inc. announced today that it today that it has inked a deal to acquire Lake Forest, Ill.-based Hospira, Inc. for about $17 billion. The deal is for $90 per share in cash.
Pfizer plans to finance the deal with a combination of cash and new debt. It also projects annual cost savings as a result of the transaction of about $800 million by 2018. It is expected to close in the last half of 2015.
“The proposed acquisition of Hospira demonstrates our commitment to prudently deploy capital to create shareholder value and deliver incremental revenue and EPS growth in the near-term,” said Ian Read, chair and chief executive of Pfizer in a statement. “In addition, 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. Coupled with Pfizer’s global reach, Hospira is expected to drive greater sustainability for our Global Established Pharmaceutical business over the long term.”
In May 2014 Pfizer’s $119 billion bid for UK-based AstraZeneca PLC collapsed and ever since, rumors have flown about who Pfizer might acquire. In October Pfizer announced a stock repurchase plan of $11 billion in conjunction with a previous $1.3 billion share repurchase program. Analysts of
Other companies rumored to be in Pfizer’s bull’s-eye were UK-based GlaxoSmithKline , Dublin-based Actavis plc (ACT) and New York-based Bristol-Myers Squibb Company .
“AstraZeneca’s results once again highlight the improving fundamentals and underscore why Pfizer had it in its sights,” said Mick Cooper, analyst at Edison Investment Research in a statement. “The main question remains whether management can achieve its ambitious medium-term goals and these suggest that, whilst still relatively early days, progress is being made. The acquisition of Actavis’s respiratory assets is the logical extension of the Almirall deal, and necessary to strength one of AstraZeneca’s growth pillars given the increasing competition in this market.”
Hospira develops and markets injectable drugs and infusion technologies. In addition, it is a worldwide leader in biosimilars.
“The Pfizer-Hospira combination is an excellent strategic fit, presenting a unique opportunity to leverage the complementary strengths of our robust portfolios and rich pipelines,” said F. Michael Ball, Hospira’s chief executive officer in a statement. “I want to recognize and thank our 19,000 employees around the world for their tireless efforts to deliver more affordable healthcare solutions, increase patient access to high-quality care and drive sustained growth for our shareholders.”
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