Pfizer - Wyeth Merger Looks to Be Clear of Antitrust Concerns

This is developing into a situation where the more the Pfizer (PFE) - Wyeth (WYE) merger is researched in depth, the more it looks as if the combination is virtually clear of any legitimate antitrust concerns.

Critical research and analysis of major transactions such as this tends to be relatively cautious where regulatory matters and timing are concerned. The fact is that major (and often minor) pharmaceutical/biotech mergers are vulnerable to at least some delay, if only for the "educational" aspects frequently employed by regulators when complex products and/or markets are involved.

In this case, there is not much education needed, as several recent major deals in this sector (Aventis/Sanofi (SNY), Pharmacia/Pfizer, SmithKline/Glaxo (GSK), etc.) have laid much of the groundwork for this deal. Although it was mentioned as a secondary factor originally, it must again be acknowledged that the DOJ/FTC should be extremely familiar with the the products and markets involved here, regardless of the transition to new leadership.

Add to this the belief of this publication, based on research to this point, that the combined entity simply will not be able to control a single product market, post-merger. This concept includes both current market products and, perhaps more importantly, the pipeline products which PFE covets. So far, not a single product (market or pipeline) has been discovered in which there is not ample competition from other major players in the industry. This is admittedly surprising given the magnitude of this transaction and the research approach of this publication this publication noted above. In other words, it was expected that problematic overlaps would surface, but to this point just the opposite has occurred.

The only variable of concern is indeed the new DOJ/FTC leadership and its motivation to establish authority through this transaction. In this context, the recently announced TKTM-LYV deal may actually improve this deal's chances for a smoother HSR review as the WYE-PFE combination is facing far less public scrutiny and, in this publication's opinion, raises far less antitrust concerns under current guidelines. In fact, it can be stated with some degree of certainly that this proposed merger presents almost no actual antitrust violations.

That being said, it cannot be suggested that regulators will let this deal pass quickly. They will not. However, even in a theoretical strict regulatory environment, this transaction should, and very likely will, obtain the necessary approvals without major difficulties or delays.

At this stage, this publication is very positive on this deal overall and has no expectation that regulatory issues will prevent a close before the end of the third quarter of this year.

Comments

[TnTMom:]

The FTC should kill this deal simply on the grounds that Pfizer is single-handedly eliminating the R&D capabilites of the US Pharma industry ( the world leader) for the sake of a few added pennies per share in earnings. The opioid of instant gratification almost destroyed our financial industry and, through Pfizer with the unwitting help of the FDA, it is on track to do the same to the pharmaceutical industry.

Feb 14 08:50 AM

[Soon to be ...:]

How many pharmaceutical companies does Pfizer have to destroy before they are stopped?!?! What will happen to the THOUSANDS of Wyeth employees???

Feb 14 04:17 PM

[Irony?:]

Taxpayers money bails out banks. Banks then fund PFE. PFE uses funds to buy Wyeth. Wyeth and other jobs cut by approx 20,000. Taxpayers mortgaged their own future to fund their own job loss. Taxpayers need to come up with more money to keep out of work people afloat.
Maybe NOW isn't the best time to have to fairly viable companies "merge?"

Feb 14 11:25 PM

[Bruschak:]

What is the conclusion of this article (No anti-trust issues in Pfizer take over of Wyeth) actually based upon? I don’t see a single reference or any discussion of the products involved. As such, this article is nothing but unfounded speculation.

What about the overall market share of Wyeth’s Effexor XR and Effexor combined with Pfizer’s Zoloft?. Or Wyeth’s Tygacil and Zosyn/Tazocin combined with Pfizer’s Zyvox, and for anti-neoplastics, Wyeth’s Torisel combined with Pfizer’s Sutent? What about the animal health industries (www.reuters.com/articl...)?

Are these combined market shares significant or not?

The American anti-trust institute sees a number of potential issues with this take-over as referenced here: www.antitrustinstitute...
Perhaps if the author did some actual research, a different conclusion might emerge.

Sadly, this title finds itself onto web sites like Yahoo finance and people assume that there are no issues associated with the take over without understanding the limitations of the unsupported opinion stated here.

Feb 17 12:42 PM