Zero new shares of either stock are being created—this is strictly a swap. It's true that there will be many more shares of ZTS available for trading (because PFE will no longer own any), but that doesn't alter ZTS' market cap and enterprise value.
PFE-ZTS addendum: Anyone who owns ZTS and is thinking of selling it in order to buy PFE and then reacquire ZTS at a 7% discount in the upcoming swap should think again! There are two problems with such a tactic:
1. The PFE-ZTS swap may be oversubscribed, in which case you will get only a pro rata allocation of ZTS as a result of the swap; and
2. If the spread between the two stocks shrinks to less than 7% during the June 17-19 averaging period (the spread is currently 15%), then ZTS shares acquired in the swap will have a narrower discount than 7% (possibly no discount at all) due to the approximately 1:1 upper bound on the exchange ratio.
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