Drug giant to become even bigger

Pfizer, the world's largest drug firm, is to acquire smaller rival Pharmacia for $60 billion in stock, published reports said on Monday, creating an industry behemoth with a broad array of best-selling products.

US-Swedish Pharmacia declined to comment on the takeover reports but said it would release a statement later in the day.

"We are going to distribute a press release later on today. Until the...press release we do not have any comments,"​ spokeswoman Katarina Lokke told Reuters.

The transaction is expected to be announced later on Monday, said the New York Times' and Wall Street Journal's websites, citing people familiar with the matter.

The merger would create an industry giant boasting more than $48 billion in annual revenue and combine several top-selling drugs, including Pfizer's Viagra and Lipitor, the popular cholesterol-lowering drug, along with Pharmacia's top-selling arthritis drugs, Celebrex and Bextra.

It also would bolster Pfizer's already strong position as the top drug maker in the United States, while vaulting it to top spots in Europe, Japan and Latin America, the New York Times said.

Terms of the transaction call for New York-based Pfizer to exchange 1.4 of its shares for each Pharmacia shares, the papers said. That would value the Peapack, New Jersey-based Pharmacia at $45.08 per share, a 38 per cent premium to the company's closing price on Friday of $32.59 on the New York Stock Exchange.

Pfizer shareholders would own 77 per cent of the combined company, the papers said, and its chairman and chief executive, Henry McKinnell, will retain the same titles after the merger. Pharmacia chairman and CEO Fred Hassan will become vice-chairman of the company's board.

The transaction has been approved by the boards of both companies, the reports said. Pharmacia also intends to continue with its previously announced plan to spin off its 84 per cent stake in US-based agricultural products maker Monsanto, the papers said.

The deal comes as large drug companies around the world scramble to consolidate as an overall slowdown in revenues and new drugs hit the market. Pfizer pulled off one of the most successful mergers in recent memory when it acquired rival Warner-Lambert in February 2000 for $114 billion.