Pfizer will buy Wyeth for $68 billion in cash and stock. The deal is intended to give Pfizer a broader product base, more geographical coverage, and an established biologics foundation to help it survive the loss of Lipitor’s exclusivity at the end of 2011.

Said Jeffrey B. Kindler, Pfizer’s chairman and chief executive officer, “The combination of Pfizer and Wyeth provides a powerful opportunity to transform our industry. It will produce the world’s premier biopharmaceutical company whose distinct blend of diversification, flexibility, and scale positions it for success in a dynamic global health care environment. The new company will be an industry leader in human, animal and consumer health. With our combined biopharmaceuticals business, it will lead in primary and specialty care as well as in small and large molecules. Its geographic presence in most of the world’s developed and developing countries will be unrivaled.”

In its announcement of the acquisition, Pfizer stated, “It is expected that no drug will account for more than 10% of the combined company’s revenue in 2012.” Given that Lipitor, which currently accounts for 25% of Pfizer’s sales, will be falling off the board by then, it’s possible this goal could have been reached without adding Wyeth’s product slate.

The acquisition will be financed by a combination of Pfizer’s cash hoard (some of which is overseas and will be taxed if it’s repatriated to the U.S.), a 50% cut in its dividend, $22.5 billion in bank loans, and stock. The combined company plans to cut 15% of its workforce and generate savings of $4 billion from current operations.

As a result of the acquisition, Wyeth has pulled out of talks to buy Crucell, a Dutch biopharma company.

The deal includes a massive $4.5 billion breakup fee if Pfizer’s credit rating drops or its financiers back out. The deal is expected to close by 4Q09.

Here are several pharma-bloggers discussing the deal:

Derek Lowe (and more):

Peter Rost

WSJ’s Health Blog covers the analyst call

Pharmservices (and more)