Pfizer To Buy Hospira For $15.23 Bln

(RTTNews) - Drugmaker Pfizer Inc. (PFE) said Thursday that it has agreed to buy Hospira, Inc. (HSP), the world's largest producer of injectable drugs, for $15.23 billion in cash to improve the growth trajectory of its global established pharmaceutical business.

Hospira shareholders will receive $90 per share in cash, a 39% premium to the company's closing stock price of $64.80 on Wednesday. The total enterprise value of the deal has been pegged at about $17 billion.

Hospira shares are currently trading at $87.75, up $22.95 or 35.42%, while Pfizer shares are currently trading up 74 cents or 2.31% at $32.81.

The deal, which has been approved by the Boards of Directors of both companies, is expected to close in the second half of 2015.

Pfizer expects the acquisition to be immediately accretive upon closing. The deal is expected to add $0.10 to $0.12 per share to Pfizer's earnings for the first full year after closing. The New York-based company also expects the deal to deliver $800 million in annual cost savings by 2018.

Pfizer expects to finance the deal through a combination of 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 EPS growth in the near-term," said Ian Read, Chairman and Chief Executive Officer, Pfizer. "In addition, Hospira's business aligns well with our new commercial structure and is an excellent strategic fit for our Global Established Pharmaceutical business, which will benefit from a significantly enhanced product portfolio in growing markets."

Lake Forest, Illinois-based Hospira is a provider of injectable drugs and infusion technologies. The company's specialty injectable pharmaceuticals also comprises biosimilars.

Both sterile injectables and biosimilars are large and growing categories. Pfizer estimates the global marketplace value for generic sterile injectables to be $70 billion and for biosimilars to be about $20 billion in 2020.

Speculations were rife about a big acquisition by Pfizer ever since its $118 billion bid for AstraZeneca PLC (AZN, AZN.L) was rebuffed by the British drugmaker last year. There were reports that Pfizer had evinced interest in buying Actavis Plc (ACT), although no formal talks or offer took place.

Pfizer's revenue continues to be hurt by negative impact from drug-patent losses and the termination of certain co-promotion collaborations.