Filed by Warner-Lambert Company
pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant Rule 14a-12
of the Securities Exchange Act of 1934
Commission File No: 001-3608
Subject Company: Warner-Lambert Company
THE FOLLOWING PRESS RELEASE WAS ISSUED BY WARNER-LAMBERT
ON FEBRUARY 7, 2000:
PFIZER AND WARNER-LAMBERT AGREE TO $90 BILLION MERGER
CREATING THE WORLD'S FASTEST-GROWING MAJOR
PHARMACEUTICAL COMPANY
Warner-Lambert Shareholders to Receive 2.75 Pfizer Shares for Each
Warner-Lambert Share, Valued at $98.31 Per Share
Compounded Three-Year Annual Earnings Growth of 25% Forecast With $1.6
Billion in Cost Savings by 2002; Companies to Realize Operational and Sales
Benefits, Increase Annual Research and Development Expenditures to $4.7
Billion in 2000
Leadership in Therapeutic Areas Includes Cardiovascular, Lipid Lowering,
Central Nervous System and Infectious Diseases; 138 Compounds in Development in
Complementary Pipelines
New Company to be named Pfizer Inc, Will Integrate
"In a Spirit of Partnership and Mutual Respect"
NEW YORK, N.Y. AND MORRIS PLAINS, N.J., Feb. 7, 2000 -- Pfizer Inc and
Warner-Lambert Company today announced they have entered into a definitive
merger agreement to create the world's fastest-growing major pharmaceutical
company.
Under terms of the merger agreement, Pfizer will exchange 2.75 shares of
Pfizer common stock for each outstanding share of Warner-Lambert stock in a
tax-free transaction valued at $98.31 per Warner-Lambert share, or $90
billion, based on Pfizer's February 4 closing price of $35.75. This
represents a 34% premium over the average closing prices of Warner-Lambert
during October 1999.
The combined company will have annual revenues of approximately $28
billion, including $21 billion in prescription pharmaceutical sales, and
will have a market capitalization in excess of $230 billion.
Compounded annual revenue and earnings growth are expected to be 13 percent
and 25 percent, respectively, through 2002. The transaction will be
accretive in the first full year of operations and will use pooling of
interests accounting. Upon completion, Pfizer's shareholders will own
approximately 61% of the new company on a fully diluted basis, and
Warner-Lambert shareholders will own 39%.
"By combining two world-class organizations to create the fastest-growing,
major pharmaceutical company in the world, we are positioned for global
leadership in the discovery of new medicines that will benefit millions of
patients around the world," said William C. Steere, Jr., chairman and chief
executive officer of Pfizer. "Pfizer and Warner-Lambert represent a new
competitive standard for our industry. We will work together in a spirit of
partnership and mutual respect to capitalize on the extraordinary
opportunity now before us."
"The unwavering goal of our Board of Directors has been to secure the best
possible transaction for Warner-Lambert shareholders and the current Pfizer
merger terms achieve that goal," said Lodewijk J.R. de Vink,
Warner-Lambert's chairman, president and chief executive officer. "Our two
organizations, having worked together for several years to achieve the
unprecedented success of Lipitor, will bring the same energy and intensity
to achieving the most rapid and seamless integration of the two companies."
"Through our Lipitor partnership, we've gained a deep appreciation for
Warner-Lambert's commitment to quality and innovation in health care. Our
conviction that Warner-Lambert is the right partner for us has only been
strengthened as we have explored the complementary nature of our
companies," said Dr. Henry McKinnell, president and chief operating officer
of Pfizer. "Working together, we will create a new organization made up of
the best people, best practices and best facilities, and the combined
talents of Pfizer and Warner-Lambert people will make us not just bigger,
but better," he added.
The merger agreement between Warner-Lambert and American Home Products has
been terminated and the cross-options have been rescinded without
consideration. Warner-Lambert is paying AHP a $1.8 billion break-up fee.
Mr. Steere and Mr. de Vink also commented, "We would like to recognize the
efforts of American Home Products in helping to resolve the issues."
BOARD OF DIRECTORS AND MANAGEMENT TEAM TO BE DRAWN FROM BOTH COMPANIES
Eight independent directors from Warner-Lambert's Board will be invited to
join Pfizer's Board. Mr. Steere will be chairman and chief executive
officer. Dr. McKinnell will be president and chief operating officer. From
the period of contract signing to closing, the transition planning team
will be co-chaired by Dr. McKinnell and Dr. Anthony H. Wild, executive vice
president and president, Pharmaceutical sector of Warner-Lambert. Three
members of the Warner-Lambert management team will join Pfizer's Corporate
Management Committee.
Mr. de Vink will remain as Chairman and CEO of Warner-Lambert until
closing. He has made a personal decision not to be an executive in the
company after the closing.
"I am pleased that Lodewijk will remain as CEO of Warner-Lambert until our
transaction closes," said Mr. Steere. "While I respect his personal
decision to leave following the closing, we are hopeful that he will remain
available to advise on key issues as we integrate and harmonize our two
companies," he added.
Dr. McKinnell emphasized the new company's competitive strengths:
o Unprecedented depth and breadth of products, including
seven billion-dollar products: Norvasc, Lipitor, Zoloft,
Zithromax, Diflucan, Celebrex and Viagra. The Parke-Davis
trade name will be preserved and represented through the
product portfolio, a dedicated sales force and research
organization. Specific areas of product focus include:
o The industry's broadest range of products that
treat diseases associated with cardiovascular
risks, including: Norvasc for high blood
pressure and angina; Lipitor for high
cholesterol; Accupril for high blood pressure;
and Glucotrol XL and Rezulin for diabetes.
o A significantly expanded program in treating
central nervous system disorders such as
depression, anxiety, epilepsy and schizophrenia.
Parke-Davis brings to Pfizer valuable expertise
in this area and a sales force that has
extensive experience in calling on mental health
professionals.
o Infectious diseases, where Pfizer will now have
a vastly expanded portfolio including Pfizer's
Zithromax and Diflucan anti-infectives.
Cutting-edge HIV research comes from
Warner-Lambert's Agouron, one of the world's
foremost biotechnology companies. Pfizer's
hospital-based field force fits seamlessly with
Agouron's outstanding community-based
specialists. Pfizer will also have a major
research program in cancer, including work in
anti-angiogenesis.
o Women's health, with an expanded field force
dedicated to women's health professionals.
Pfizer will emphasize not only reproductive
health but also the importance of cardiovascular
and mental health for women.
o The continuing success of the cholesterol-lowering medication
Lipitor, which has been co-promoted by Warner-Lambert and Pfizer
since 1996. Lipitor is the number one statin in the U.S. and the
fastest-growing product among cholesterol lowering agents. This
year, Lipitor is expected to exceed $5 billion in worldwide sales
and a spring introduction is planned in Japan. The companies will
benefit from Pfizer's strength in Japan. In addition, the
Lipitor-Norvasc combination product represents an important
opportunity.
o The combined research and development operations of the company,
headed by Pfizer Vice Chairman Dr. John F. Niblack, will have a
worldwide scientific staff of over 12,000 and $4.7 billion in
annual R&D expenditures in 2000, the largest in the industry. The
combined companies have few research overlaps, and a total of 138
compounds in development in areas including central nervous
system disorders, oncology, cardiovascular disease, metabolic
disease and infectious disease. The Parke-Davis Research Center
will continue to be located in Ann Arbor, Michigan.
o A strong international presence with enhanced global reach in all
major markets, including Japan, the second largest pharmaceutical
market in the world, where Pfizer is the leading non-Japanese
pharmaceutical company. The company will be in the top tier in
most major markets.
o Excellent opportunities for additional earnings growth based on
anticipated cost savings and efficiencies totaling $1.6 billion.
Two hundred million dollars of these savings are expected to be
achieved by year-end 2000, $1 billion by year-end 2001, and $1.6
billion by year-end 2002.
These cost savings alone will accelerate the projected compounded
annual net income growth through 2002 for the new company from 20%
to 25%, excluding one-time transaction and restructuring charges.
Diluted earnings per share for Pfizer as a stand alone company are
projected to be $1.04 for 2000, $1.25 for 2001, and $1.50 for
2002, representing 20% average compounded growth per year. For
the combined Pfizer/Warner-Lambert entity, pro forma earnings per
share in 1999 would be $.80. From this base, we project that
diluted earnings per share for the combined entity will be $.98
in 2000, $1.27 for 2001, and $1.56 for 2002, representing 25%
average compounded growth per year. These numbers include the
$1.6 billion of cost savings phased in over this time period, but
do not include any increased sales from collaborative activities.
o A major presence in the consumer health care field, including the
Warner-Lambert Confectionery business, through global brands
including Halls, Benadryl, Sudafed, Listerine, Desitin, Schick,
Visine, Ben Gay, Lubriderm and Barbasol.Warner-Lambert's and
Pfizer's long experience in retail and over-the-counter products
provides a platform for future prescription-to-OTC switches for
both companies.
o Significant opportunities for the company's Animal Health
business, which has a growing pipeline of genetically engineered
vaccines, gene-therapy products and novel, convenient-to-use
medicines.
Corporate headquarters of the company will remain in New York. The
Warner-Lambert Consumer Health Care Division, along with the other consumer
businesses and selected additional functions, will be located at
Warner-Lambert's offices in Morris Plains, N.J. The worldwide and U.S.
pharmaceutical division headquarters will be in New York with operational
support functions in both New York and Morris Plains. The transaction is
subject to customary conditions, including the use of pooling-of-interests
accounting, shareholder approval at both companies and usual governmental
and regulatory approvals. The transaction is expected to close in mid-2000.
"Our combined company is now strategically positioned as the global leader
in research-based health care as we enter an era of unprecedented
scientific discovery, medical breakthroughs, accelerating consumer choice
and continuing changes in the delivery of care," Mr. Steere said. "We look
forward to discovering and developing many of tomorrow's major medical
innovations."
These communications include certain "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. These
statements are based on management's current expectations and are naturally
subject to uncertainty and changes in circumstances. Actual results may
vary materially from the expectations contained herein. The forward-looking
statements in this document include statements about future financial and
operating results and the proposed Pfizer/Warner-Lambert transaction. The
following factors, among others, could cause actual results to differ
materially from those described herein: inability to obtain, or meet
conditions imposed for, governmental approvals for the merger with
Warner-Lambert; failure of the Pfizer or Warner-Lambert stockholders to
approve the merger; the risk that the Pfizer and Warner-Lambert businesses
will not be integrated successfully; the costs related to the merger; and
other economic, business, competitive and/or regulatory factors affecting
Pfizer's and Warner-Lambert's businesses generally. More detailed
information about those factors is set forth in Pfizer's and
Warner-Lambert's filings with the Securities and Exchange Commission,
including their Annual Reports filed on Form 10-K for the fiscal year ended
1998, especially in the Management's Discussion and Analysis section, their
most recent quarterly reports on Form 10-Q, and their Current Reports on
Form 8-K. Pfizer and Warner-Lambert are under no obligation to (and
expressly disclaims any such obligation to) update or alter their
forward-looking statements whether as a result of new information, future
events or otherwise.
* * * * * *
On November 15, 1999, Pfizer filed a joint proxy statement/prospectus in
connection with its proposed merger with Warner-Lambert. Pfizer and
Warner-Lambert will be jointly preparing an amendment to the joint proxy
statement/prospectus and will be filing such amendment with the Securities
and Exchange Commission as soon as practicable. WE URGE INVESTORS TO READ
THE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS TO BE
FILED WITH THE SEC, BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Investors
and security holders may obtain a free copy of the joint proxy
statement/prospectus and other documents filed by Pfizer Inc and
Warner-Lambert Company with the Commission at the Commission's web site at
www.sec.gov. In addition, the joint proxy statement/prospectus and other
documents filed with the SEC by Pfizer may be obtained for free from Pfizer
Inc. directing a request to Pfizer Inc., 235 42nd Street, New York, New
York 10017, Attention: Investor Relations, telephone: (212) 573-2668.
READ THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS CAREFULLY BEFORE
MAKING A DECISION CONCERNING THE MERGER.
Warner-Lambert, its directors, executive officers and certain other members
of Warner-Lambert management and employees may be soliciting proxies from
Warner-Lambert stockholders in favor of the merger. Information concerning
the participants will be set forth on a Schedule 14A filed as soon as
practicable.
Pfizer, its directors, executive officers and certain other members of
Pfizer management and employees may be soliciting proxies from Pfizer
stockholders in favor of the merger. Information concerning the
participants will be set forth on a Schedule 14A filed as soon as
practicable.
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