Pfizer, Wyeth in demand

Pfizer and Wyeth rose by 4.43% to 8.95% at 10:02 IST on BSE after the boards of Pfizer and Wyeth approved the proposed merger with a 7:10 equity swap ratio.

Wyeth (up 8.95%), and Pfizer (up 4.43%), edged higher.

The BSE Sensex was up 294.16 points, or 1.45% at 20,511.55.

Wyeth had outperformed the market over the past one month till 22 November 2013, rising 43.82% compared with the Sensex's 3.10% fall. The scrip had also outperformed the market in past one quarter, rising 32.48% as against Sensex's 10.40% rise.

Pfizer had outperformed the market over the past one month till 22 November 2013, rising 36.86% compared with the Sensex's 3.10% fall. The scrip had also outperformed the market in past one quarter, gaining 32.16% as against Sensex's 10.40% rise.

The boards of Pfizer and Wyeth approved the merger between the two pharmaceutical companies on Saturday, 23 November 2013.

As per the merger scheme, shareholders of Wyeth will get seven Pfizer shares for every 10 shares held. The appointed date of the merger scheme would be 1 April 2013. The merged entity will create a single brand of Pfizer.

Meanwhile, both the companies announced liberal interim dividends. Pfizer said it will be paying an interim dividend of Rs 360 per share to Pfizer shareholders and Wyeth will pay Rs 145 per share to Wyeth stockholders.

The swap ratio for merger of Wyeth with Pfizer has been recommended after taking into account the payment of the interim dividend and is on a post dividend basis, the two companies said separately.

In the international market, Pfizer acquired Wyeth in 2009. The global merger of these two companies have been completed by the end of the same year except certain countries, including India. The valuation of equity swap and regulatory hurdles for the merger of two listed entities were the main reason for the delayed decision for the consolidation of these companies in India.

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