The European Commission approved on Friday the proposed merger of US drug manufacturers Pfizer and Wyeth, subject to Pfizer renouncing some of its animal health products in Europe.
Pfizer, already the world’s biggest pharmaceutical firm, announced the planned merger in January, seeking diversification as it prepares for the expiration of patents on its blockbuster drugs.
The US$68 billion deal appears to be the biggest takeover in the global pharmaceutical sector since Pfizer acquired Warner-Lambert Co for US$93.4 billion in 2000, financial analysts say.
The EU’s executive branch, which enforces EU competition law, said the merger was conditional on “Pfizer’s commitment to divest several types of animal health vaccines, pharmaceuticals and medicinal feed additives” in Europe.
“The commission had concerns that the transaction, as originally notified, would have raised competition issues in the field of animal health products on a number of national markets,” it said in a statement.
“In the light of the commitments offered by Pfizer, the Commission has now concluded that the proposed transaction would not significantly impede effective competition in the EEA or any substantial part of it.”
The European Economic Area (EEA) includes the 27 EU member states plus Iceland, Liechtenstein and Norway.
In addition, the European Commission said Pfizer — best known for the anti-cholesterol treatment Lipitor and erectile dysfunction drug Viagra, as well as AIDS drugs — has offered to “divest” a Wyeth plant in Sligo, Ireland.
“In the area of human health, the companies’ activities are to a large extent complementary,” it said.
The merger still awaits a green light from competition authorities in the US, China and other jurisdictions, as well as approval from Wyeth shareholders, a statement on Pfizer’s Web site said.
If the deal goes ahead, the combined company will be No. 1 in terms of biopharmaceutical revenues in the US with a market share of about 12 percent. It will hold about 10 percent of the market in Europe.