Pfizer completes $11.85bn sale of infant nutrition business to Nestle

US pharmaceutical giant Pfizer Inc (NYSE:PFE) said it had completed the divestment of its infant nutrition business, Pfizer Nutrition, to Swiss food group Nestle SA (VTX:NESN) for USD11.85bn (EUR9.1bn) in cash.

The deal, which was agreed in April, has secured antitrust clearance in most of the markets, the vendor said. The regulatory approval process is still underway in Kenya, South Africa and five Latin American countries. In these markets Pfizer will continue to operate the business on an interim basis, it said, adding that with the completion of the sale, it would launch a new USD10bn share repurchase programme.

In a separate statement, Nestle stated that the deal, which would add some 4,500 Pfizer Nutrition employees, would bolster its infant nutrition business in key segments and geographies. It has previously said that it would cover a portion of the purchase price with a 364-day bridge loan worth USD8.5bn from a syndicate of banks.

Concerning the countries where the regulatory process has not finished yet, the buyer will continue exploring strategic options, it noted.

Pfizer took counsel from Morgan Stanley & Co LLC, Centerview Advisors LLC, Skadden, Arps, Slate, Meagher & Flom LLP, Clifford Chance LLP and DLA Piper LLP on the deal.

Food group Nestle in $11.85bn deal to acquire Pfizer’s infant nutrition unit

Swiss food group Nestle SA (VTX:NESN) is taking over the infant nutrition business of US pharmaceutical giant Pfizer Inc (NYSE:PFE) in a USD11.85bn (EUR8.9bn) deal, the two companies said on Monday.

Nestle’s chief executive, Paul Bulcke, said infant nutrition has always been core to the group’s business and with this addition it would widen its portfolio and expand its position in the global sector.

The business to be bought makes 85% of its sales in emerging markets, complementing perfectly Nestle’s own baby nutrition operations while serving its growth-focused strategy, the buyer said.

For Pfizer, which has been reviewing alternatives for the nutrition business, the divestment is in line with its goal to generate shareholders value, chairman and CEO Ian Read said, adding the group would use the funds to buy back shares or invest in other business development projects.

Pfizer Nutrition, whose revenues increased by annual 15% to USD2.1bn in 2011, has sales, product development, manufacturing and business centres in the US, Latin America, Europe, the Middle East, Africa and Asia.

Its portfolio includes everyday and speciality infant and toddler formulas, follow-on formulas, as well as maternal and adult nutrition products. Its employees in 60 countries will be taken on by Nestle pending consultations with work councils and unions.

Completion, subject to conditions including regulatory approvals, is expected in the first half of 2013.

Pfizer is being advised by Morgan Stanley & Co LLC, Centerview Advisors LLC, Skadden, Arps, Slate, Meagher & Flom LLP, Clifford Chance LLP and DLA Piper LLP.