Pfizer India and Wyeth Ltd to merge Indian operations

Pharmaceutical giants Pfizer India and Wyeth India on Saturday said that  they will merge their Indian operations in order to create a single brand in the country.

The merger of their Indian operations comes nearly four years after Pfizer and Wyeth merged their global operations (except India) in a blockbuster $68-billion deal. (See: Pfizer-Wyeth create $68-billion blockbuster deal)

Wyeth became Pfizer's subsidiary in India after the global merger.

Both the Bombay Stock Exchange-listed companies said that their boards have approved a proposal to merge Wyeth India with Pfizer India and have also announced an interim dividend of Rs360 per share and Rs145 per share respectively.

Based on the proposed merger swap ratio, Pfizer India will issue approximately 15.9 million new equity shares to Wyeth India shareholders.

As per the merger scheme, shareholders of Wyeth India will receive 7 shares of Pfizer India for every 10 shares held by Wyeth India shareholders.

"I am very pleased to announce that today the Board of Directors of Pfizer Ltd and Wyeth Ltd have given their approval to merge the two companies thus initiating an important first step towards the creation of a single Pfizer brand," Pfizer India and Wyeth India, managing director, Aijaz Tobaccowalla, said in a statement.

"I strongly believe that this merger will increase long term value for all stakeholders," he added.

The merged company will have a  single brand image leading to stronger market presence and be amongst the top 10 pharma companies in India in terms of domestic sales.

In the Indian market, cheaper generic drugs made by smaller but aggressive companies like Cipla, Ranbaxy, Dr Reddy's, Aurbindo, Sun Pharma, Cadila, Lupin and several others, dominate the highly-fragmented Rs37,000 crore drug retail market.

Pfizer India holds a 2.2 per cent market share in India, while Wyeth India holds 0.8 per cent.

Six of Pfizer brands feature among the Top 100 pharmaceutical brands in India, while it two local brands -- Corex cough formulation and Becosules multivitamin rank among the top 15 pharmaceutical drug brands.

Pfizer India had a turnover of Rs947.98 crores for the year ended 31 March 2013.

Wyeth India introduced several new therapies and vaccines in the country, including hormone replacement therapy and vaccines against haemophilus influenzae and pneumococcal diseases.

It posted net profit of Rs130 crore on revenues of Rs 661 crore for the year ended 31 March 2013.