Indiantelevision.com Team

(26 June 2006 5:00 pm)

MUMBAI: Johnson & Johnson (J&J) will be acquiring Pfizer Consumer Healthcare for $16.6 billion in cash. The J&J board of directors gave approval to the transaction, which is expected to close by the end of 2006.

Pfizer Consumer Healthcare's global business of personal care and over-the-counter (OTC) products achieved sales of $3.9 billion in 2005. Worldwide market-leading brands include Listerine oral care products and the Nicorette line of smoking cessation treatments. Other widely recognised brands include Lubriderm, Visine, Neosporin, Sudafed, Zantac and Benadryl.

"This combination creates the world's premiere consumer health care company. Our consumer business has a long tradition of outstanding performance and a proven track record in growing consumer brands at above-category levels through innovation. This acquisition builds upon our broad base in health care products and our leadership objectives in the consumer, pharmaceutical and medical devices and diagnostics markets," said Johnson & Johnson chairman and CEO William C. Weldon.

The Pfizer Consumer Healthcare business adds a diverse portfolio of strong, growing, enduring brands that provide J&J with leadership positions in nine additional categories, including large new segments such as smoking cessation and mouthwash.

The addition of Listerine, the world's #1 mouthwash, transforms J&J's oral health care business by more than tripling it into a franchise well in excess of $1 billion. It further expands the franchise presence in more than 60 markets.

The combined portfolio of OTC brands will solidify the global market-leading position of J&J's OTC franchise.

Under the terms of the agreement, J&J will also acquire the US OTC switch rights to Zyrtec, Pfizer's once-a-day, non-sedating prescription antihistamine, upon patent expiration.

"We see the consumer health care markets as increasingly attractive growth opportunities as consumers take greater interest in and responsibility for their own health. In addition, higher levels of disposable income in developing nations are helping drive increased demand for consumer health products," Weldon said.

The Pfizer Consumer Healthcare brands complement J&J's consumer and OTC products, which include Band-Aid, Tylenol, Reach, Splenda, and the Clean & Clear, Aveeno and Neutrogena skin care brands.

J&J is uniquely positioned to drive continued growth in Pfizer Consumer Healthcare's product portfolio and create new market opportunities through its proven capability of expanding enduring brands geographically and by bringing continuing innovation into consumer brands.

"Being broadly based in health care allows us to leverage our expertise in science and technology across our businesses. Through this acquisition, we look to benefit both from Pfizer Consumer Healthcare's excellent product portfolio and pipeline and from the valuable skills and experience of its employees," Weldon said.

The acquisition is expected to be accretive to J&J's earnings per share on a cash basis in 2009. The integration will provide significant opportunities to leverage the sales, administration and supply chain of both organisations globally.