BALTIMORE — Pfizer Inc., the maker of the blockbuster drugs Vioxx and Celebrex, said it would pay $8 billion to buy the majority stake in its biggest drug company and sell it at a discount to investors.
The deal was announced Thursday in a regulatory filing.
Pfizer shares rose nearly 5% to $69.50 a share in afternoon trading.
It was Pfizer, which makes Viagra and other top-selling erectile dysfunction drugs, that had asked the Justice Department for a waiver that allows it to use the cash to pay down debt.
Pfizers shares have risen more than 20% this year amid a surge in demand for its drugs.
“This transaction will provide Pfizer with an additional financial structure to meet its obligations under the agreement and ensure that we continue to have the strength to meet our financial needs, including to provide long-term financial support to our shareholders,” the company said in a statement.
The company said it plans to use its proceeds to fund a capital plan, which it said would focus on growing the company’s workforce, improving its sales and innovation and increasing revenue growth.
It did not say how much it would use the proceeds for.
Pfizer shares had fallen nearly 6% in morning trading.
The company’s stock has lost almost $4 billion since June.
The transaction, the biggest in its history, comes as the company faces increasing scrutiny over its business practices.
It has said it is under investigation by regulators for potentially overcharging Medicare and Medicaid for treating the millions of patients it treats.