The world's largest drug maker, Pfizer, announced on Monday that it plans to buy rival company, Wyeth, in one of the biggest pharmaceutical firm mergers in almost a decade. The move will help Pfizer maintain its position as the world's number one drug company.
The deal will cost Pfizer some $68 billion and will be financed through cash, debt and stock.
Analysts say the merger could help Pfizer at a time when generic drugs are becoming more competitive, and people are cutting back on prescriptions during tough economic times.
Pfizer's patents on several best-selling drugs, including Viagra and Lipitor, are due to expire during the next few years. Wyeth, a leading maker of vaccines and biotech drugs, will help Pfizer diversify its portfolio.
Pfizer Chief Executive Officer Jeffrey Kindler says the transaction addresses the challenges his company faces.
"Wyeth is just a terrific fit with us, [they are] very complementary businesses," he said. "Together we're going to create the world's premier biopharmaceutical company."
But the outlook is not entirely positive for Pfizer, which reported a 90 percent plunge in fourth-quarter profits compared to the last three months of 2007.
The company also announced on Monday that it plans to cut 10 percent of its workforce - about 8,000 jobs, and close five manufacturing plants.