Mumbai: Four years after the merger of top US drug makers Pfizer Inc. and Wyeth Inc. following a $68 billion global deal, their Indian units on Saturday got the formal approval from their respective boards for the merger of the entities in the country. The boards of Pfizer Ltd and Wyeth Ltd in their meetings held on Saturday approved the merger with a 7:10 equity swap ratio.

“I am very pleased to announce that today the board of directors of Pfizer Ltd and Wyeth Ltd have given their approval to merge the two companies, thus initiating an important first step towards the creation of a single Pfizer brand for the combined entity," said Aijaz Tobaccowalla, managing director of Pfizer in India.

As per the merger scheme, shareholders of Wyeth Ltd will get seven Pfizer Ltd shares for every 10 shares held. Based on the proposed merger swap ratio, Pfizer India will issue approximately 15.9 million new equity shares to Wyeth India shareholders.

In 2009, world’s largest drug maker Pfizer acquired Wyth in a $68 billion global deal. The global merger of these two companies have been completed by the end of the same year except certain countries, including India. The valuation of equity swap and regulatory hurdles for the merger of two listed entities were the main reason for the delayed decision for the consolidation of these companies in India.

The merger process would now require several approvals including shareholders of both the companies, Securities and Exchange Board of India (Sebi), stock exchanges, Foreign Investment Promotion Board (FIPB) and Bombay high court, among others.

“We anticipate this will take approximately another nine months." said Tobaccowalla on Saturday.

The respective boards of the Indian units have also announced an interim dividend of 360 per share for Pfizer shareholders and 145 per share for Wyeth shareholders. The equity swap ratio was decided after announcing the dividend payout.

“I strongly believe that this merger will increase long term value for all stakeholders. The combined entity would have an increased therapeutic presence and a de-risked business profile. “ added Tobaccowalla.

DSP Merrill Lynch Ltd was the advisor to Pfizer India and Citigroup Global Markets India Pvt Ltd advised Wyeth India on the valuation and swap ratio.

On Friday, shares of Wyeth rose 2.11% to close at 814.15 on the BSE, while the shares of Pfizer closed flat (-0.01%) at 1,431.55. The benchmark Sensex closed at 20,217.39 points, down 0.06%.