Pfizer acquires Hospira for $15 Billion

Pfizer acquires Hospira for $15 Billion

Pfizer acquires Hospira for $15 Billion

Pharmaceutical giant Pfizer agreed to acquire Hospira for $ 15.2 Billion. This acquisition comes after rejected offer to takeover AstraZeneca for more than $ 100 Billion. But from reasons of political resistance, deal had to be withdrawn.

 Pfizer announced on Thursday that it would pay $ 90 a share for Hospira, infusion technologies and drugs maker through injection. Total value of acqusition, which includes debt is about $ 17 Billion, which will be finance with existing cash and new debt.

 “The proposed acquisition of Hospira demonstrates our commitment to prudently deploy capital to create shareholder value and deliver incremental revenue and [earnings per share] growth in the near term,”  said Ian Read, Pfizer’s CEO

For Hospira is big opportunity to sell its business with really good margin, when it’s shares are record high with 50 percent growth in last year. Pfizer is paying a 39 percent premium on top of that. Pfizer is paying over 20 times Hospira’s EBITDA.

In 2004 Hospira was spun off from Abbott.

“The Pfizer-Hospira combination is an excellent strategic fit, presenting a unique opportunity to leverage the complementary strengths of our robust portfolios and rich pipelines,” F. Michael Ball, Hospira’s chief executive, said in a statement.

Analysts and investors examining idea to split companies in two parts, but by the words Mr. Read has so far not said there is any formal plan to break the company up.

” We are managing the business in two segments, broadly speaking,” Mr. Read said while announcing second-quarter earnings. “One being innovative and the other being established.”

Pfizer advisors were Guggenheim Securities, Lazard and JPMorgan, while Clifford Change and Ropes & Gray provided legal advice. Hospira was advised by Morgan Stanley and Skadden, Arps, Slate, Meagher & Flom as legal advisor.

The deal is expeted to close in the second half of year.

Mr. Stakebay says:

 This combination is continuing mergers and acquisitions in pharmaceutical sector, which started last year. Pfizer reach 800 million in annual cost savings by 2018. Pfizer sees large potential growth in Hospira, because would sales of generic sterile injectables to reach $ 70 Billion by 2020.

President and CEO of Pfizer……….Ian C. Read……….(2010-present)………$ 18 947 747 (2013)

CEO of HOSPIRA …………………F. Michael Ball …… (2011-present)………. $ 9 892 283 (2013)

 

PFIZER

HOSPIRA

Revenue

$ 51.584 billion (2013)

$ 4.002 Billion (2013)

Operating income

 $ 17.765 billion (2013)

$ 16.6 Million (2013)

Profit

$ 22.003 billion (2013)

$ – 8.3 Million (2013)

Total assets

$ 172.101 billion (2013)

$ 6.178 Billion (2013)

Total Equity

$ 76.62 billion (2013)

2.961 Billion (2013)

Employees

78 000 (2013)

17 000 (2013)

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