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Pharmaceutical mega-merger stalls
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11-8-99 New York. It was to have been a relatively simple deal. But now the merger that pharmaceutical giants American Home Products and Warner-Lambert Co. agreed to last week is being threatened by a competing bid from Pfizer. The $70.1 billion deal announced by American Home Products and Warner-Lambert would create the world's largest pharmaceutical and consumer healthcare products company. The new company, to be called AmericanWarner Inc., is expected to have sales of $26 billion a year and one of the largest research budgets-nearly $3 billion-in the industry. If it goes through, the deal is expected to become final in the second quarter of 2000. "The merger is an ideal strategic combination that will create exceptional long-term growth and value for the shareholders, customers, and employees of both companies," said John R. Stafford, American Home Products' chair, president, and CEO. But Pfizer also wants a piece of the action, and Thursday announced a $79.5 billion takeover bid of Warner-Lambert, the world's 15th largest prescription drug company. "This combination would create the strongest, most dynamic pharmaceutical company in the world," said Pfizer Chair and CEO William C. Steere Jr. The combination of Pfizer and Warner-Lambert would also create the world's largest pharmaceutical company, with annual sales of $28 billion and a research and development budget of $4 billion a year, according to Pfizer. Although the Warner-Lambert board rejected the counteroffer, claiming it is "not in a position at this time to take any action with respect to the Pfizer proposal," Pfizer filed a motion in a Delaware court to have part of the Warner-Lambert-American Home Products deal declared invalid in hopes that its offer might be reconsidered.
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