The operations would be unified under 'Pfizer brand'.
The boards of Pfizer India and Wyeth India approved a swap ratio which would give Wyeth Ltd shareholders 7 Pfizer shares for every 10 they hold.
The companies have also announced separate interim dividend payouts in which Pfizer will give Rs 360 per share, while Wyeth will give Rs 145 a share.
Wyeth will cease to exist as a separate legal and brand entity in the country. For the year ended March 2013, Wyeth reported total revenues of Rs 714 crore and profit of Rs 130 crore. On the other hand, Pfizer India clocked revenues of Rs 1,156 crore and a bottom-line of Rs 503 crore.
"The boards of Pfizer India and Wyeth India have given their approval to merge the two companies, which will create a single Pfizer brand...the combined entity would have increased therapeutic presence and a de-risked business profile," Pfizer India and Wyeth India managing director Aijaz Tobaccowalla told reporters here.
He said the merger process would take nine months to complete as it involves a string of approvals.
The US drug giant Pfizer Inc had acquired its homegrown rival Wyeth for USD 68 billion in 2009 and Wyeth Ltd became a subsidiary of Pfizer Inc in India.
"We will have increased product base with wider access to market. This merger will also improve our market share and strengthen the competitive position," Tobaccowalla said, adding segments like women's health, vaccines, respiratory, CNS, anti-infectives will be on high focus for the company.
Pfizer will issue around 15.9 million new shares to Wyeth shareholders for this merger. The recommended swap ratio has been reviewed by merchant bankers who have issued separate fairness opinions to the respective Board of Directors, the two companies said.
"Implied pro-forma shareholding of Pfizer Inc, post merger will be 63.9 per cent," the company said.
Talking on Pfizer India post-merger, Tobaccowalla said the combined entity will have strong financial profile with improved market share.
Pfizer India is not a big player enjoying only 1.9 per cent market share. Its market value stands at Rs 1,281 crore while Wyeth Ltd is valued at Rs 832 crore as per Friday's closing price.