J&J; to Acquire Pfizer’s Nonprescription Brands

Johnson & Johnson said Monday that it would buy Pfizer Inc.’s consumer healthcare business for $16.6 billion in cash to increase its lead in the market for nonprescription health products.

Pfizer’s consumer brands, including Listerine mouthwash, Sudafed decongestant and Nicorette smoking cessation products, have annual sales of about $4 billion.

But the price apparently was too high for Wall Street and shares of J&J; sank $1.11 to $60.21.

Even so, Banc of America Securities analyst Glenn Novarro said the deal probably would prove wise for J&J;, whose consumer brands include Band-Aids, painkiller Tylenol and Neutrogena skin-care products.

Novarro said the consumer products from Pfizer would bring in badly needed revenue when two blockbuster J&J; drugs -- Risperdal for schizophrenia and epilepsy drug Topamax -- have to compete with cheaper generics starting in 2008 and 2009, respectively.

The acquisition would consolidate J&J;’s position as the world’s largest supplier of consumer healthcare and over-the- counter medicines.

Pfizer said proceeds of the deal with J&J; would help it repurchase as much as $7 billion of its common stock in 2006 and as much as $10 billion in 2007, so the divestiture would not hurt its earnings in 2007 and would add to them in 2008.

Pfizer shares rose 37 cents to $23.01.