Merger to create a giant pharmaceutical company

Two major drug companies have announced plans to merge to create the world’s fourth largest enterprise.

Pfizer and Wyeth – the first and ninth biggest pharmaceutical companies by revenue, respectively- are to consolidate in a deal that could create the world’s fourth largest company after Exxon, Wal-Mart, and Procter&Gamble, the New York Times reports.

Experts stress that the deal may have as much to do with new research opportunities as with cost-cutting. "Pfizer and Wyeth combine sales forces and other operations, they will have a sleeker cost structure," Erik Gordon, a professor at the Ross School of Business at the University of Michigan told the NYT.

Still, the deal could transform Pfizer from a purely pharmaceutical company into a diversified healthcare giant on account of Wyeth’s huge portfolio of biotech drugs, vaccines, and consumer health products from Advil to Robitussin, according to the Associated Press.

Pfizer, with the largest revenue of any drug company worldwide, derives most of its sales from the cholesterol-lowering drug Lipitor. Statins such as Lipitor have been linked to a number of side effects, the most common of which are muscle problems.