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UPDATE 4-Pfizer plans animal health IPO
* IPO, rather than outright sale, would avert stiff taxes
* New company to be called Zoetis, had $4.2 bln rev last year
* Pfizer shares up 0.4 percent
By Ransdell Pierson
June 7 (Reuters) - Pfizer Inc plans to separate its animal health unit into a stand-alone company, a move Wall Street expected as the largest U.S. drugmaker focuses more intently on its core pharmaceuticals business.
Pfizer said on Thursday that preparations were under way for a public offering of a minority stake in the new animal health company, which would be called Zoetis.
The business, which generated revenue of about $4.2 billion last year, sells medicines, vaccines and other products for livestock and pets. It has more than 9,000 employees and markets products in more than 120 countries.
Pfizer said it would provide details of the proposed IPO in the coming months, when it reports second-quarter earnings.
New York-based Pfizer, which agreed in April to sell its baby formula business to Nestle SA for $11.85 billion, had also been shopping its animal health unit since last year. But Chief Executive Officer Ian Read has said in recent months that any separation of the animal health business would probably be in the form of an IPO, to avoid hefty taxes.
ISI Group analyst Mark Schoenebaum valued the animal health unit at about $15 billion, and estimates Pfizer could generate $3 billion in cash proceeds by spinning off 20 percent of the business through an IPO.
"Pfizer did not provide any information on what they will do with the majority stake that they will continue to own," he said in a research note.
Schoenebaum speculated Pfizer would eventually divest its possible 80 percent remaining stake by offering those shares of Zoetis to Pfizer shareholders at a slightly discounted price. By doing so, he said the drugmaker would reduce by about 8 percent the number of outstanding shares of Pfizer.
In the meantime, however, Pfizer will treat the animal health business as a continuing operation.
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