J&J wins bidding war for Pfizer

Contenders for Pfizer's consumer health care division, which the global pharmaceuticals behemoth put up for sale earlier this year (Marketletter February 13), have reportedly been numerous, but the eventual winner, announced June 26, was US major Johnson & Johnson.

J&J noted that it has entered into a definitive agreement to acquire the Pfizer business for $16.6 billion in cash and both firms said that the deal had received the approval of their respective boards of directors. It is still subject to shareholders' and regulatory authorities' clearance.

Other potential buyers for the Pfizer unit had been UK-based Reckitt Benckiser and GlaxoSmithKline, as well as Swiss group Novartis and Germany's Bayer. The latter more or less dropped out when its decided to buy fellow German drugmaker Schering AG (Marketletters passim), and Novartis did not make much of its intentions. The two UK firms had both expressed strong interest, but declined to comment on why they did not proceed with an acquisition commitment. However, industry observers are of the view that the price Pfizer was asking (initially thought to be just $16.0 billion), was just too much. According to a recent Reuters report, RB and GSK's bids were nearer the $14.0 billion level.