If Wyeth takes Parke Davis ... if Pfizer does?
Ananth Iyer
06 November 1999
Yet another global drug industry merger will soon impact the Indian pharmaceuticals industry. Only, we shall have to wait a bit to see the exact shape of the merger.
On 3 November 1999 American Home Products and Warner Lambert Company announced a merger to form the world's biggest drug company with combined annual sales of $26 billion. But, on 5 November, before they could go any further on this plan, Pfizer Inc made a counter-bid offer to acquire Warner Lambert. Pfizer's offer is $96.4 per Warner Lambert share, against the value of $83.26 per share proposed by AHP. So what happens in India if AHP and Warner Lambert merge? And what if Pfizer acquires Warner Lambert?
If Wyeth Lederle India Ltd and Parke Davis India Ltd, the Indian subsidiaries of AHP and Warner Lambert, decide to merge, they will create the fifth largest drug company in India in terms of domestic sales. This may well happen, considering that the Warner Lambert management has rejected Pfizer's bid.
Wyeth Lederle is a 51 per cent subsidiary of American Home Products. Warner Lambert holds 40 per cent of Parke Davis's equity.
IMS Health 1998 audit data for India (Jan to Dec) ranks Lederle 14th in terms of domestic sales in India, with estimated sales of Rs 228.7 crore. Parke Davis ranked 24th in 1998, with sales of Rs 165.9 crore. With combined sales of Rs 395 crore, a merger of these two companies would catapult them jointly to the fifth position behind Glaxo Wellcome, Ranbaxy, Cipla and Hoechst Marion Roussel. Together, the two companies would hold slightly more than 3 per cent of the Indian pharmaceutical market.
If Pfizer wins, the marriage of Indian subsidiaries Pfizer India and Parke Davis would result in the formation of the fourth largest Indian drug company in terms of domestic sales. Pfizer holds 40 per cent of the Pfizer India's equity.
