Warner-Lambert Moves Forward with AHP Merger

NEW YORK--Amidst a merger bidding duel, pharmaceutical giant Warner-Lambert Co. (NYSE:WLA) stayed on course to merge with American Home Products (NYSE:AHP), which, at a price of around $70 billion, would create the biggest drug merger in history. In a move to disrupt the deal, Pfizer Inc. (NYSE:PFE ) bid almost $80 billion to step ahead of AHP and merge with WLA, whose board of directors voted on Nov. 4 to refrain from acting on the Pfizer proposal. The decision was reportedly based on the year's worth of efforts concerning the AHP deal, as well as the belief that a merger with AHP is in the best long-term interests of its shareholders, colleagues and communities. WLA directors added that Pfizer misrepresented its dealings with WLA.

AHP, which failed last year in two separate merger talks with SmithKline Beecham and Monsanto Co., manufactures prescription and over-the-counter drugs and is the parent company for the Solgar Vitamin and Herb Co. The company posted a third quarter 1999 loss of $2.87 billion or $2.20 per share on revenues of $3.32 billion. A year prior, results were $618 million or $.47 per share in earnings and $3.22 billion in net sales. Warner-Lambert's 1999 third quarter sales were $3.2 billion with earnings of $417 million or $.47 per share, compared to 1998 third quarter sales of $2.7 billion and $302 million or $.34 in earnings.

Further details of the pending merger were not released, but Wall Street analysts expect AHP shares to be used to acquire those of WLA. Also, it is anticpated that John Stafford, AHP chief executive officer, will become chairman of the combiend company, while Lodewijk J.R. de Vink, WLA chief, will likely become chief executive of the new firm.