NEW YORK — Pfizer, the world's largest drugmaker, will pay $68 billion for rival Wyeth in a move that will consolidate two of the industry's largest drug developers.

The deal comes as Pfizer's profit takes a brutal hit from a $2.3 billion legal settlement over allegations it marketed certain products off-label, or for indications they are not yet approved. The New York-based company is also cutting 10 percent of its work force, slashing its dividend, and reducing the number of manufacturing sites.

Early today, Pfizer, the maker of Lipitor and Viagra, said it will pay $50.19 per share under for Madison, N.J.-based Wyeth, valuing it at a 14.7 percent premium to the company's closing price of $43.74 Friday.

Both companies' boards of directors approved the deal.

Pfizer has been under pressure to make a bold move as it faces what is referred to as a patent cliff in the coming years. As key drugs lose patent protection they will face generic competition and declining sales. The world's top-selling drug, the cholesterol treatment Lipitor, faces generic competition starting in November 2011. It brings in about $13 billion per year for the company.

Acquiring Wyeth helps Pfizer diversify and become less-dependent on individual drugs, while adding strength in biotech drugs, vaccines and consumer products.

Shortly after announcing the Wyeth deal, Pfizer said fourth-quarter profit plunged on a charge to settle investigations into off-label marketing practices. The company earned $268 million, or 4 cents per share, compared with profit of $2.72 billion, or 40 cents per share, a year prior. Revenue fell 4 percent to $12.35 billion from $12.87 billion.

Excluding about $2.3 billion in legal charges, the company says profit rose to 65 cents per share.