Pfizer 2010 Annual Report Download - page 116

Notes to Consolidated Financial Statements
Pfizer Inc. and Subsidiary Companies
21. Subsequent Events
A. Acquisition of King Pharmaceuticals, Inc.
On January 31, 2011, we completed our tender offer for all of the outstanding shares of common stock of King Pharmaceuticals, Inc.
(King). Upon completion of the tender offer, we accepted for purchase all of the shares validly tendered and not validly withdrawn at
a purchase price of $14.25 per share, net to the seller in cash, without interest thereon and subject to any required withholding
taxes. As a result, we paid approximately $3.3 billion in cash for approximately 92.5% of the outstanding shares of King common
stock. Also, in accordance with the terms of the merger agreement, individuals designated by Pfizer now constitute a majority of the
King Board of Directors. We intend to complete the acquisition of King through a merger on or about February 28, 2011, without a
vote of the remaining shareholders of King. As a result of the merger, each remaining share of King common stock will be converted
into the right to receive $14.25 per share, net in cash, without interest and less any required withholding taxes.
King’s principal businesses consist of a prescription pharmaceutical business focused on delivering new formulations of pain
treatments designed to discourage common methods of misuse and abuse; the Meridian auto-injector business for emergency drug
delivery, which develops and manufactures the EpiPen®; and an animal health business that offers a variety of feed-additive
products for a wide range of species.
The assets acquired and liabilities assumed from King, the consideration paid to acquire King, and the results of King’s operations,
are not reflected in our consolidated financial statements as of and for the twelve months ended December 31, 2010. Due to the
significant limitations on access to King information prior to the completion of the tender offer and the limited time since the
completion of the tender offer, the initial accounting for the business combination is incomplete at this time. As a result, we are
unable to provide the amounts to be recognized for the major classes of assets acquired and liabilities assumed, including the
information required for accounts receivables, pre-acquisition contingencies and goodwill. We will include this and other related
information in our first quarter 2011 Form 10-Q.
B. New Research and Development Productivity Initiative
On February 1, 2011, we announced that we are continuing to closely evaluate our global research and development function and
will accelerate our current strategies to improve innovation and overall productivity by prioritizing areas with the greatest scientific
and commercial promise, utilizing appropriate risk/return profiles and focusing on areas with the highest potential to deliver value in
the near term and over time. In connection with these actions:
•We estimate that we will incur pre-tax employee-termination charges in the range of approximately $800 million to $1.1 billion and other
pre-tax exit and implementation charges in the range of approximately $300 million to $500 million, all of which will result in future cash
expenditures. We expect most of these charges to be incurred in 2011 and the balance to be incurred in 2012.
•We estimate that we will incur total pre-tax impairment and additional depreciation—asset restructuring charges in the range of
approximately $1.1 billion to $1.3 billion, of which approximately $800 million to $900 million represent additional depreciation—asset
restructuring charges. Most of these charges will be associated with our Sandwich, U.K. facility. We expect most of these non-cash
charges to be incurred in 2011 and the balance to be incurred in 2012.
114 2010 Financial Report