Pfizer, the world's largest drugmaker, agreed in principle on Sunday night to acquire a rival, Wyeth, for $68 billion, according to people involved in the negotiations. Barring an 11th-hour twist, the transaction is expected to be announced this morning, these people said.
The deal would be the first big merger backed by Wall Street in months. And while credit has been notoriously tight of late, five banks, including four that got federal bailout money, have agreed to lend Pfizer more than $25 billion to for the deal. Pfizer, which has $26 billion in cash and equivalents, would finance the remainder.
While boards of both companies agreed to the broad outlines of the deal over the weekend, these people said, one issue appeared to be an obstacle: whether Pfizer would be able to renege if the economy worsens and Wyeth's prospects faded. Pfizer was said to be forced to agree to pay a $4.5 billion break-up fee if it did not complete the deal under certain circumstances, an amount almost twice as much as a typical fee on a deal of this size in boom times.
NEW YORK TIMES
