European Union antitrust authorities cleared US drugmaker Pfizer's $68 billion takeover of rival Wyeth today, subject to Pfizer's divesting a number of animal health operations.
"The commission had concerns that the transaction, as originally notified, would have raised competition issues in the field of animal health products on a number of national markets," the European Commission said in a statement.
"In the light of the commitments offered by Pfizer, the commission has now concluded that the proposed transaction would not significantly impede effective competition in the EEA (European Economic Area) or any substantial part of it," it said.
Pfizer said in response it expected to close the deal at the end of the third quarter or during the fourth. It also said China's ministry of commerce had extended its review of Pfizer's submission beyond the initial 30-day period.
The transaction remains subject to regulatory approval in the United States and in certain other jurisdictions and also needs clearance from Wyeth shareholders.
The European Commission concluded that the two companies' activities were largely complementary in human health but raised competition concerns in animal health.
Pfizer therefore proposed divesting a number of vaccine areas, sedatives, antibiotics and parasiticides and, in medical feed additives, oral rehydration salts. It also offered to divest Wyeth's manufacturing facility in Sligo.
Analysts have said the acquisition by Pfizer, the world's largest drugmaker, would help the company diversify into vaccines and injectable biologic medicines, seen as more immune to generic products than traditional pills.
The company is expected to see sales impacted when its blockbuster cholesterol treatment Lipitor begins to face US generic competition in 2011.
Pfizer has forecast an earnings boost in the second full year after closing the Wyeth deal, with cost savings estimated at $4 billion by the third year.
Reuters