Mumbai, Sept. 8: The Supreme Court today dismissed the special leave petition (SLP) filed by dissenting shareholders and approved the merger of Parke Davis (India) Ltd and Pfizer India Ltd.
The amalgamation of these companies was stalled for over a year as few minority shareholders voiced their dissent against the swap ratio. The board of directors of both companies had approved the swap ratio in June last year.
Sources said with decks now cleared for the merger, it might set in motion the amalgamation of Pharmacia as well. Last year, Pfizer Inc had acquired Pharmacia Corp in an all-stock deal of over $60 billion. To complete the merger process, Pfizer will now issue equity shares in the proportion of four of its shares for every nine of Parke Davis.
Pfizer will also pay a dividend of Rs 7.50 per share to its shareholders.
The news set the Pfizer scrip afire on the bourses. Opening at Rs 409, the scrip shot up to the day's high of Rs 469.75, a gain of over 17 per cent, after which it closed at Rs 460.05.
Pfizer will hold a 40 per cent stake in the merged entity, which will be the fourth largest pharmaceutical company.
Pfizer with its superior distribution reach will now be in a position to better market some of the key products of Parke Davis.
Pfizer posted a net profit of Rs 75.94 crore for the year ended November 30, 2002. Its total income rose by around 68 per cent at Rs 602.50 crore.
In 2000, the worldwide merger of Pfizer Inc and Warner Lambert resulted in the creation of the largest global pharmaceutical company. Shareholders of both the companies had approved the merger proposal in August last year and Bombay High Court had given its clearance in February.