Hospira's share price looks set to soar when markets open after Pfizer revealed it was buying the injectable drugs giant for $17bn (£11.1bn).
The deal represents $90 a share in cash for Hospira, which closed at $64.80 a share last night. Hospira's share price was up nearly 35 per cent in pre-marketing trading, while Pfizer's rose 2.8 per cent.
Pfizer said it was a “strategically complementary combination” of two businesses, with Hospira bringing a broad generic sterile injectable product line, a portfolio of biosimilars and branded sterile injectables.
The combined company will create “a leading global sterile injectables business”, with Pfizer using its size to “significantly expand the reach of Hospira's products” beyond the US into Europe and key emerging markets.
Ian Read, chairman and chief executive of Pfizer, said the deal demonstrated the pharma group's “commitment to prudently deploy capital to create shareholder value and deliver incremental revenue and EPS growth in the near-term”.
“Hospira is expected to drive greater sustainability for our Global Established Pharmaceutical (GEP) business over the long term,” he added.
It comes less than a year after Pfizer's abortive attempt to buy British pharma firm AstraZenaca, which is due to report its results tomorrow. The timing has not gone unnoticed.