Cash-rich Pfizer is splashing out some $17 billion to buy Hospira and become a leading player in the biosimilars market.

The drugs behemoth is paying $90 per share to get hold of Hospira, which is also a leading player in injectables and infusion technologies, which works out as $15.2 billion in cash, plus paying off Hospira debt. Chief executive Ian Read said the deal, which is expected to be immediately accretive upon closing, “demonstrates our commitment to prudently deploy capital to create shareholder value and deliver incremental revenue and EPS growth in the near-term”.

He added that Hospira’s “business aligns well with our new commercial structure and is an excellent strategic fit”. Pfizer says it will also look to significantly expand the reach of Hospira’s products - which are currently distributed primarily in the USA - to Europe and key emerging markets.

Pfizer says generic sterile injectables market is estimated to be $70 billion and biosimilars will be worth $20 billion in 2020. It added that the deal, which should close in the second half, will deliver $800 million in annual cost savings by 2018.

The size of the deal looks to have ended any ideas Pfizer had of returning to woo AstraZeneca after last year's failed bid.