Pfizer, the world's largest drug company, announced Monday that it would acquire U.S. rival Wyeth in a move to diversify and bolster its revenue base. The deal, valued at approximately $68 billion, is the largest drug firm merger since Glaxo Wellcome and SmithKline Beecham merged in 2000.

The acquisition will bolster Pfizer's pipeline of new drugs and vaccines, which is vulnerable due to the expiration of a patent for the company’s anti-cholesterol treatment Lipitor.

The deal is expected to help Pfizer diversify into vaccines and injectable biologic medicines by adding Wyeth's product line. Pfizer would realize major cost savings by streamlining duplicate areas of the two companies. Officials from the two companies expect the transaction to close at the end of the third quarter or during the fourth quarter 2009.

The transaction provided a "powerful opportunity to transform our industry," says Jeffrey Kindler, chief executive officer of Pfizer. "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 healthcare environment," he said.

Wyeth owns Fort Dodge Animal Health. Pfizer also has its own significant presence in the animal-health market. Details were not available on merging the companies’ animal-health operations.