China's biggest dairy company is reportedly weighing a bid for Pfizer's ($PFE) infant-formula business. Sources tell the Financial Times China Mengniu Dairy is talking with UBS about jumping into the bidding for Pfizer's nutritionals unit, which the drugmaker plans to sell or spin off as it refocuses more tightly on its prescription drug business. The business could be worth $10 billion-plus.
Mengniu is at the early stages of considering an offer for the Pfizer unit, sources tell Bloomberg, adding that Mengniu officials won't decide whether to bid until more financial information on the Pfizer unit is available. In a securities filing, the company stresses it is not in direct talks with Pfizer about a potential deal, and if it does proceed, it will announce that fact publicly.
"The company ... currently has no concrete arrangement or plan in connection with the bid," Mengniu said in its filing with the Hong Kong bourse (as quoted by Reuters). "The group will closely monitor the development as other dairy producers would do."
As the FT reports, Pfizer is expected to send out information to possible bidders next month, but so far, the process has moved forward more slowly than some had expected. Advised by Morgan Stanley and Centerview on the unit's future, Pfizer has been studying the tax consequences of various deal structures. The company says it won't offer an official update until next year.
Other bidders expected to participate are Danone, the French dairy giant, which is advised by Lazard and JPMorgan; Nestlé, advised by Rothschild; and Mead Johnson, Bristol-Myers Squibb's ($BMY) ex-nutritionals unit, FT says. Heinz, the U.S. food company, may also step in.
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- see the Bloomberg article