Pfizer boosts injectable drug offering with Hospira acquisition

NEW YORK — Pfizer on Thursday announced that they have entered into a definitive merger agreement to acquire Hospira, a leading provider of injectable drugs and infusion technologies and a global leader in biosimilars, for $90 a share in cash for a total enterprise value of approximately $17 billion. The boards of directors of both companies have unanimously approved the merger.

 

"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 CEO, 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. Coupled with Pfizer’s global reach, Hospira is expected to drive greater sustainability for our Global Established Pharmaceutical business over the long term."

 

This strategically complementary combination will add a growing revenue stream and a platform for growth for Pfizer’s GEP business. 

 

"The addition of Hospira has the potential to fundamentally improve the growth trajectory of the Global Established Pharmaceutical business, vault it into a leadership position in the large and growing off-patent sterile injectables marketplace by combining the specialized talent and capabilities of both companies, including enhanced manufacturing, and advance its goal to be among the world’s most preeminent biosimilars providers," commented John Young, group president, Pfizer Global Established Pharmaceutical business. "We're excited to combine Hospira’s expertise and key talent with that of Pfizer to create a leading global business that will deliver an even broader portfolio of important and life-saving sterile injectable medicines to patients around the world."

 

Both sterile injectables and biosimilars are large and growing categories. The global marketplace value for generic sterile injectables is estimated to be $70 billion in 2020. The global marketplace for biosimilars is estimated to be approximately $20 billion in 2020.

 

The transaction is subject to customary closing conditions, including regulatory approvals in several jurisdictions and approval of Hospira's shareholders, and is expected to close in the second half of 2015.

 

Pfizer's financial advisors for the transaction were Guggenheim Securities, J.P. Morgan and Lazard, with Ropes & Gray acting as its legal advisor and Clifford Chance advising on international regulatory matters. Morgan Stanley served as Hospira’s financial advisor, while Skadden, Arps, Slate, Meagher & Flom & Affiliates served as its legal advisor.