New York-based Pfizer will sell its consumer healthcare division to Johnson & Johnson (J&J) for $16.6 billion and focus on developing new drugs and acquiring new technology, according to announcements by both companies. The acquisition makes J&J the world's largest supplier of consumer healthcare and over-the-counter (OTC) products.

Pfizer Consumer Healthcare, which reported $3.9 billion in revenue last year, includes such OTC products as Nicorette, Listerine, Lubriderm, Visine, Neosporin, Sudafed, Zantac and Benadryl.

According to its statement, Pfizer plans to use the $13.5 billion in after-tax proceeds to purchase up to $7 billion in common stock in 2007 and up to $10 billion in 2008. Furthermore, Pfizer plans to invest in treatments for ailments such as Alzheimer's disease, diabetes, obesity and infectious diseases.

The agreement, approved by both companies' boards of directors, is expected to close by the end of 2006 after regulatory review by U.S. and European antitrust agencies.