Pfizer vs. Warner-Lambert
After months of hostile exchanges, Pfizer announced it was buying Warner-Lambert for about $90 billion in stock in February 2000. Pfizer's motivation: Warner-Lambert's now mega-blockbuster drug Lipitor, Chemical & Engineering News noted in 2002. The companies were co-promoting the drug at the time.
The battle began when Warner-Lambert and American Home Products (AHP) announced in November 1999 their plans to merge, thus creating the world's largest pharmaceutical company. Pfizer sought to block this move the next day by announcing an unsolicited $80 billion stock offer for Warner, the largest hostile takeover attempt in the history of the pharmaceutical business, as this report notes.
Warner fought back and threatened to end the companies' co-marketing agreement for Lipitor, adding that Pfizer's unsolicited bid may violate a standstill agreement in the deal. Warner CEO Lodewijk de Vink wrote that his company's board was ''disappointed'' that it was in such a dispute with Pfizer, whose actions do not agree ''with the way we believe partners should treat one another.'' He added that he was committed to its merger with AHP, and, as CNN reported, there were on-again, off-again talks and a flurry of lawsuits. However, De Vink was ultimately pressured by shareholders to consider Pfizer's overtures, especially after the company increased its bid for Warner. Furthermore, AHP faced billions of dollars of liability over its diet pills once used in the fen-phen combination, Bloomberg reported.
Tensions began to wane, and the companies came to an agreement. "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," de Vink said in statement. The merger agreement between Warner and AHP, which received a $1.8 billion break-up fee, was terminated. AHP subsequently spun off its non-pharma businesses and rebranded itself as Wyeth--now part of Pfizer.