FTC clears Pfizer takeover of Pharmacia

Final regulatory hurdle to finishing deal this week

April 15, 2003|By BLOOMBERG NEWS

NEW YORK -Pfizer Inc., the world's largest drug maker, won Federal Trade Commission approval yesterday for its $57 billion purchase of Pharmacia Corp., clearing the final regulatory obstacle to completing the takeover this week.

Last month, both companies agreed to sell some products to win U.S. antitrust approval, and in February reached a similar accord to obtain European Commission clearance.

The acquisition will give Pfizer all of the revenue for Celebrex and Bextra, top-selling painkillers that are jointly marketed by the two companies. Pfizer expects the combined company to post 10 percent annual revenue growth during the next three years and generate savings of $2.5 billion by 2005, the drug maker said when the acquisition was announced in July.

The settlement "ensures that U.S. consumers continue to enjoy the benefits of rigorous competition," said Joe Simons, director of the FTC's bureau of competition.

To win FTC approval, Pfizer agreed to sell Novartis AG, a bladder-control drug that might compete with Pharmacia's Detrol and Johnson & Johnson's Ditropan XL in the $760 million-a-year U.S. market.

Pharmacia will surrender its rights to impotence medicines in clinical trials that might someday compete with Pfizer's Viagra, which controls 95 percent of the $1 billion market, the FTC said.

Pfizer also agreed to sell the hormone therapy replacement treatment Femhrt to Galen Holdings PLC, a Northern Irish drug maker. In addition, Pharmacia will sell its over-the-counter Cortaid creams to Johnson & Johnson, and Pfizer will divest its Bonine motion-sickness drugs to Insight Pharmaceuticals Corp., the FTC said.

The FTC said Pfizer's $4.2 billion sale of its Adams candy unit, which makes Trident and Dentyne gums, to Cadbury Schweppes PLC eliminates concerns that the combined company might raise the price of cough drops. Adams makes Halls cough drops, and Pharmacia makes the rival Ludens brand.

The companies also agreed to divest drugs for dogs and cows to address concerns the combination would reduce competition for these products.

Pfizer's shares rose 61 cents to $32.12 yesterday. Pharmacia's shares gained $1.11 to $45.

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