Pfizer has agreed to acquire Hospira, a provider of injectable drugs and infusion technologies and a global provider in biosimilars headquartered in Lake Forest, Ill., for $90 a share in cash, for a total enterprise value of approximately $17 billion.

The boards of directors of both companies have unanimously approved the merger, which is expected to be immediately accretive upon closing by $0.10-$0.12 per share for the first full year following the close, with additional accretion anticipated thereafter.

"The proposed acquisition of Hospira demonstrates our commitment to prudently deploy capital to create shareholder value and deliver incremental revenue and EPS growth in the near-term," said Ian Read, chairman and CEO, Pfizer. "In addition, Hospira’s business aligns well with our new commercial structure and is an excellent strategic fit for our Global Established Pharmaceutical (GEP) business, which will benefit from a significantly enhanced product portfolio in growing markets. Coupled with Pfizer’s global reach, Hospira is expected to drive greater sustainability for our business over the long term."

The combination will add a growing revenue stream and a platform for growth for Pfizer’s GEP business. The expanded portfolio of sterile injectable pharmaceuticals—comprising Hospira’s broad generic sterile injectables product line, including acute care and oncology injectables with a number of differentiated presentations, as well as its biosimilars portfolio, combined with GEP’s branded sterile injectables, including anti-infectives, anti-inflammatories and cytotoxics—will create a global sterile injectables business. The combination also reinforces GEP’s growth strategy to build a broad portfolio of biosimilars in Pfizer’s therapeutic areas of strength through the addition of Hospira’s portfolio, which includes several marketed biosimilars.

Pfizer also will use its existing commercial capabilities, global scale, scientific experience and development capabilities to significantly expand the reach of Hospira’s products, which currently are distributed primarily in the U.S., to Europe and key emerging markets, where GEP has a significant presence.

"The addition of Hospira has the potential to fundamentally improve the growth trajectory of the Global Established Pharmaceutical business, vault it into a leadership position in the large and growing off-patent sterile injectables marketplace by combining the specialized talent and capabilities of both companies, including enhanced manufacturing, and advance its goal to be among the world’s most preeminent biosimilars providers," said John Young, group president, Pfizer GEP.

Both sterile injectables and biosimilars are large and growing categories. The global marketplace value for generic sterile injectables is estimated to be $70 billion in 2020. The global marketplace for biosimilars is estimated to be approximately $20 billion in 2020.

Pfizer expects to finance the transaction through a combination of existing cash and new debt, with approximately two-thirds of the value financed from cash and one-third from debt. In addition, Pfizer anticipates the transaction to deliver $800 million in annual cost savings by 2018.

The transaction is subject to customary closing conditions, including regulatory approvals in several jurisdictions and approval of Hospira's shareholders, and is expected to close in the second half of 2015.