Could the Pfizer–Hospira deal be a stepping stone to a company split?
In early February, Pfizer announced that it would acquire Hospira for around $17 billion. Hospira’s shareholders are set to profit from the deal, with Pfizer paying $90 per share, a 40 percent premium, and netting Hospira CEO F. Michael Ball an estimated $80 million payout (1).
The merger will substantially boost Pfizer’s portfolio, particularly in the emerging biosimilars market. Especially given that a couple of weeks after the announcement, Hospira launched a generic version of J&J’s Remicade (infliximab) in several European countries. The FDA will consider in March whether to approve the drug in the US. The news has raised plenty of speculation in the pharmaceutical and business press. Most analysts agree that Pfizer is plotting futher acquisitions in the coming months, with one article touting GlaxoSmithKline and Actavis as potential targets (2). The deal is also being seen by some, including David Crow at the Financial Times (3), as another indication of a long-term plan to split Pfizer’s generic and brand name portfolios into separate companies. A split has certainly been mentioned as a possibility by Pfizer CEO Ian Read in the past, but only time will tell.
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References
- J. Cahill, “Hospira CEO Ball‘s Richest Payday Ever”, Crain’s Chicago Business (11 February 2015), http://www.chicagobusiness.com C. Swanson, “Deal-Hungry Pfizer Won‘t Stop With Hospira; Who Could Be Next?”, The Motley Fool (16 February 2015), www.fool.com D. Crow, “Pfizer’s $17Bn Hospira Buy Could Lead To Break-Up”, The Financial Times (5 February 2015), http://www.ft.com
