www.afr.com.au - 16 July 2002

Pfizer, the world's number one drug company, said on Monday it would buy rival Pharmacia in a surprise $US60 billion ($107.4 billion) deal that would distance it from its competitors and give it control of some of the world's most popular pharmaceuticals.

In what would be the biggest corporate merger in more than a year, the deal would create a mammoth new drug firm and give Pfizer full rights to one of the industry's most prized products: the arthritis drug Celebrex.

"This is an extraordinary opportunity to combine two of the fastest-growing and most innovative pharmaceutical companies and to position Pfizer for sustained long-term leadership of the global pharmaceutical industry," said Pfizer chairman and chief executive Hank McKinnell, who would maintain those titles in the new company.

The merger would create an industry behemoth with over $US48 billion in revenue and a research and development budget of more than $US7 billion.

The merged entity will employ about 2,000 people in Australia and own two out of the top three drugs on the national subsidised drug scheme - cholesterol drug Lipitor and Celebrex.

These two drugs alone had sales last year on the pharmaceutical benefits scheme totalling $460 million, or about 10 per cent of the PBS.