Tuesday, February 1, 2011

Pfizer acquisition of King Pharmaceuticals

It will likely be a few more weeks before King Pharmaceuticals employees learn how a pending acquisition by the world's largest drugmaker will affect their jobs.
Pfizer Inc. officials announced Monday the completion of a tender offer to purchase shares of the Bristol-based drug manufacturer and intentions to finish the acquisition by the end of February. Pfizer received federal antitrust approval to proceed with the $3.6 billion deal late last week.
"At this point, it's too early to determine any [job] impacts," Pfizer spokeswoman Joan Campion said in a phone interview with the Bristol Herald Courier. "We don't fully own the company, but we're expecting that to close in the first quarter -- in the next month or so. It's just too early to determine."
King has 435 administrative and manufacturing employees at its 5th Street corporate headquarters and 2,600 companywide. In addition to the Twin City, King operates drug manufacturing facilities in Florida, Illinois, Michigan, Missouri and Wisconsin, a research and development center in North Carolina and a commercial operations center in New Jersey. It also manufactures animal health products at plants in five states and China.
Pfizer employs more than 110,000 worldwide.
"We will conduct an evaluation of our work force and our real-estate holdings and make decisions based on serving our customers best, while still remaining competitive," Campion said.
Bristol, Tenn., City Manager Jeff Broughton said city officials are also awaiting word on what the purchase will mean for the company and the city.
"We have no information as to what will happen with King's manufacturing and office facility," Broughton said. "We've been waiting to try and approach Pfizer and stress to them the importance of that facility in Bristol, but we've only had preliminary conversations because they haven't completed the purchase."
New York-based Pfizer said Monday that about 93 percent -- or 230.7 million -- of King's outstanding shares were validly tendered and not withdrawn prior to a Jan. 28 deadline. Pfizer had offered to purchase the shares for $14.25 each in cash.
After agreeing to buy King in October, Pfizer extended its tender offer twice before last week's deadline.
For its money, Pfizer will acquire a group of branded prescription pharmaceuticals, including neuroscience products Skelaxin, Flector Patch, Avinza and painkiller Embeda; hospital products, including Thrombin-JMI; the EpiPen auto injector devices and nerve gas antidotes; and Remoxyl, an oxycodone capsule designed to be tamper-resistant that is awaiting approval from the Food and Drug Administration.
Pfizer, which is reporting its quarterly results today, said it will complete the deal through a short-form merger without a vote from remaining King shareholders.
In November, a number of King shareholders filed a series of class-action lawsuits attempting to block the merger. Each claims King's board of directors undervalued the company when it agreed to Pfizer's proposed purchase price and violated a fiduciary duty to make sure the company's shareholders got the best price for their stock.
Once the merger is completed, King's common stock will cease to be traded.
After announcing the tender, a share of Pfizer stock rose 7 cents on the New York Stock Exchange Monday, closing at $18.22. King's stock rose 2 cents and closed at $14.24.

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