Johnson & Johnson (J&J) has agreed to buy Pfizer's consumer healthcare business for $16.6 billion.
The agreement completes a review of strategic options that Pfizer began in February for the unit, whose brands include Listerine mouthwash, Sudafed decongestant and Nicorette anti-smoking products.
J&J's offer topped rival bids from British groups GlaxoSmithKline and Reckitt Benckiser. But the price was higher than analysts had expected, and J&J shares fell 2.2 per cent to $60 in premarket trading on the Inet electronic brokerage system.
The deal will consolidate J&J's position as the world's largest supplier of consumer healthcare and over-the-counter medicines.