Pharmaceutical company Pfizer Inc on Wednesday announced an acquisition deal worth nearly USD 15 billion with Hospira Inc in a bid to boost its portfolio of generic injectible drugs and biosimilars, i.e. biotech drugs copies.
Pfizer offered USD 90 a share in cash, a 39 percent premium to the closing stock price of Hospira on Wednesday. On the other hand, Hospira gained 35 percent to reach USD 88 before the bell on Thursday, and Pfizer soared 3.6 percent.
The acquisition deal is the largest for Pfizer since it failed AstraZeneca Plc’s takeover attempt that has rebuffed its USD 118 billion approach in 2014, but has continued to stay as a subject of speculation for takeover.
According to Pfizer, the move has clearly highlighted its commitment for deploying capital and delivering revenue as well as earnings per share growth in the upcoming term. The agreement is likely to add between 10 cents and 12 cents per share to the earnings of Pfizer in the first full year after the closure of deal, the company said.
The latest move will also help in increasing Pfizer’s established drugs business or those medications that are no longer covered by patents.
Hospira is known for manufacturing generic versions of injectible drugs that are largerly used in hospitals. It also sells several biosimilars in the overseas market. The company is also working on developing other biosimilars.
Hospira has sought approval from the US Food and Drug Administration (FDA) for marketing a copy of Remicade, blockbuster arthritis treatment from leading drugmaker Johnson & Johnson.
About USD 17 billion, including debt, is the total enterprise value of the deal with Pfizer
As per a regulatory filing, Hospira faces USD 1.75 billion in outstanding long-term debt as of September 30, 2014.
Notably, the acquisition deal needs green signal from the regulators and shareholders.