Pfizer Buys King Pharmaceuticals for $3.6 Billion (PFE)

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Drugmaker Pfizer Inc.( PFE ) on Tuesday said it has acquired fellow pharma company King Pharmaceuticals Inc. ( KG ) in a $3.6 billion cash deal.

In pursuant to the deal, Pfizer will pay $14.25 per share for KG, which is a 40% premium over the stock's Monday closing price of $10.15.

Pfizer said it expects the deal to close in either the late fourth quarter of 2010, or the first quarter of 2011. The company estimated $200 million in cost savings as a result of the acquisition by 2013.

CEO Jeffrey Kindler said "The combination of our respective portfolios in this area of unmet medical need is highly complementary and will allow us to offer a fuller spectrum of treatments for patients across the globe who are in need of pain relief and management."

Pfizer shares were mostly flat in premarket trading Tuesday.

The Bottom Line
Shares of PFE have a 4.14% dividend yield, based on last night's closing stock price of $17.38. The stock has technical support in the $15-$17 price area. If the shares can firm up, we see overhead resistance around the $19-$20 price levels. We would remain on the sidelines for now.

Pfizer Inc.( PFE ) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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This article appears in: Investing , Stocks
Referenced Symbols: KG , PFE

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