Pharmaceuticals giant Pfizer Inc will acquire Wyeth in a $68 billion cash and stock deal -- the biggest U.S. merger in three years -- to create a diverse health products company which executives hope will deliver stable growth to investors, the companies said on Monday.

The chief executive of New York-based Pfizer, Jeffrey B. Kindler, said in a statement today that the combined firms will have a distinct blend of diversification, flexibility, and scale.

The companies are highly complementary businesses, said Bernard Poussot, the CEO of New Jersey-based Wyeth.

The deal would increase Pfizer's revenue by half and will add strength in biotech drugs, vaccines and over-the-counter products, including the Advil and Robitussin brands.

The agreement values Wyeth at $50.19 per share, a 29 percent premium at the close of Thursday trading, the day before preliminary reports of a possible deal were released. In Monday pre-market trading Wyeth shares were up 4.9 percent to $43.74. Wyeth shares had peaked near $60 in 2007 and had fallen below $30 last year.

In Monday pre-market trading, shares of Pfizer (NYSE:PFE) slipped $0.45, or 2.6 percent to $17.00 in pre-market trading.

As of Sunday evening, the Wall Street Journal, citing people familiar with the matter, reported that Pfizer was working to finish securing financing for the acquisition.

According to the research firm Capital IQ, it would be the biggest merger in the U.S. in nearly three years since AT&T and BellSouth combined in a $70 billion deal in March 2006.