Pfizer will sell its Nutrition business to Nestlé for $11.85 billion in cash. Pfizer’s Nutrition business recorded revenues of approximately $2.1 billion in 2011, an increase of 15% versus 2010.
“The transaction is a testament to the success of the Nutrition business, including its excellent reputation, talented colleagues, high-quality products and market reach,” said Amy Schulman, executive vice president, Pfizer general counsel, and president and general manager, Pfizer Nutrition. “The combination of Nestlé and Pfizer’s Nutrition business, with its leading position in emerging markets, portfolio and science, will continue to serve the needs of formula-fed infants and their healthcare professionals and caregivers.”
Pfizer Nutrition is a global pediatric nutrition company with a portfolio of brands encompassing everyday and specialty infant and toddler formulas, follow-on formulas, as well as maternal and adult nutrition products. Pfizer Nutrition has colleagues in approximately 60 countries around the world and sales, product development, manufacturing, and business centers in the U.S., Latin America, Europe, Middle East, Africa and Asia.
“The sale of the Nutrition business to Nestlé is consistent with Pfizer’s intention to generate the greatest value for shareholders by maximizing the value-creation potential of our businesses and prudently managing our capital allocation,” stated Ian Read, Pfizer chairman and chief executive officer. “We remain focused on enhancing shareholder value and, following the completion of this divestiture, we expect to allocate the after-tax proceeds to further share repurchases, or invest in other business- development opportunities, with the return on share repurchases remaining our case to beat.”
Pfizer will update its 2012 financial guidance to reflect its decision to divest the Nutrition business to Nestlé when it reports its first-quarter 2012 financial results on May 1, 2012. Pfizer expects that all revenues and expenses related to the Nutrition business will be presented as Discontinued operations - net of tax, beginning with the second-quarter of 2012, on a retroactive basis for all periods presented. Pending regulatory approval, the deal is expected to close by 1H13.