Pfizer taketh away earlier this year, when it slashed its dividend in half to help pay for the Wyeth acquisition. Now, the company giveth back. It's boosted its quarterly payment to investors by 13 percent, to 18 cents. And it's pledging more increases "barring significant unforeseen events." According to the Wall Street Journal, this latest increase alone will cost the company nearly $650 million a year.
And while Wyeth may have been the reason for the earlier cut, it's also the reason for the increase, CEO Jeff Kindler said in a statement. "This increase is a testament to our commitment to enhance shareholder value and our confidence in our business and our ability to rapidly integrate Wyeth and realize the anticipated benefits of the acquisition," Kindler said. Analysts said they expect Pfizer's dividend to increase quite a bit, perhaps to as much as $1 by 2013.
As you know, Pfizer is in the middle of a big restructuring as it works to absorb Wyeth. It's shedding facilities and employees in the process. When the merger was announced, Pfizer said it expected to lay off about 19,500 people; several thousand people have already lost their jobs. Cutting costs via layoffs and consolidations, of course, is one way big mergers pay for themselves. And one way companies help foot the bill for bigger dividends.
Another, in pharma-land anyway, is new drugs. And Wyeth is already helping on that score as well: Pfizer got European approval yesterday for its Prevnar 13 vaccine, a childhood immunization it acquired along with Wyeth.
ALSO: Pfizer hired Adele Gulfo away from AstraZeneca to take over as U.S. president of primary care, overseeing Pfizer's five regional primary-care business units, commercial operations, and corporate and government relations. Report