Pharmacia Will Buy AT&T's HQ for $200M

The sale price, estimated at $200 million, is less than the $260 million AT&T originally wanted for it, and less than the $215 million number that had been circulating in recent weeks. The deal also symbolizes the current fortunes of two of the Garden State's biggest industries. While pharmaceuticals continues to grow and add jobs, telecom remains in the throes of one of its worst slumps ever.

The sale is expected to close by July, according to a joint statement released by Pharmacia and AT&T. More specific details will be announced by then, but what is known is that AT&T will continue to occupy the site under late fall, when it will move its 3,000 staffers to other sites in New Jersey. Most will go to AT&T's existing campus in nearby Bedminster, which will become its new headquarters site. As part of the deal, Pharmacia will also buy the AT&T Learning Center, which includes a 171-key overnight facility.

For Pharmacia, the move is one of consolidating its headquarters from existing locations in nearby Peapack, Bedminster and Bridgewater, all within 10 miles of the AT&T campus. "We have reached capacity at our existing locations," Pharmacia chairman/CEO Fred Hassan said when the deal was announced in Trenton on Friday. "This will bring all of our people under one roof, and it is going to be very cost-effective because people won't have to move around between different locations." His company, which moved its world HQ from London to New Jersey five years ago, will put its existing space on the sublet market.

For his part, AT&T chairman C. Michael Armstrong explained that "as we continue our restructuring, we can cut costs and increase our efficiency by consolidating in existing AT&T locations. We're pleased to be able to keep our staff operations in New Jersey."

About 2,500 Pharmacia employees are involved. The company is also expected to receive some job growth-related grant money from the state under the terms of its original deal to move its headquarters to New Jersey in 1997. The exact amount is currently being negotiated, according to state officials.

Pharmacia officials, meanwhile, estimate that they will grow their job totals by another 20% over the next five years. "This is the global epicenter of the pharmaceutical industry, and we are pleased to have done well here," according to Hassan.

Pharmacia's growth has been fueled by several high-profile drugs, including Celebrex, used for the treatment of arthritis, and Rogaine (hair replacement). Others include Detrol (bladder control), Xalatan (glaucoma), Genotropin (hormone replacement therapy) and Zyvox (an antibiotic).