Pfizer ($PFE) is holding off on the sale of its nutritionals unit. The company is still looking at the tax implications of an outright sale of the business, weighing the payoff to investors against a tax-free spinoff deal, as Bloomberg reports. A sale could amount to $10.5 billion, with major nutritionals players such as Danone and Nestle in the bidding.
Pfizer will be shipping out sales documents to potential buyers in November at the earliest, rather than this month as some investors had expected, sources tell the news service. That will give the drugmaker more time to assess the potential tax burden of a sale. The worry is that a sale might be taxed at a higher rate because Pfizer bought the nutritionals business less than three years ago. Plus, the company isn't finished pulling together numbers on the unit's business in Asia and emerging markets.
Market watchers have been keeping a close eye on Pfizer's plans to streamline all year. CEO Ian Read (photo) announced early this year he was considering paring away the drugmaker's non-core assets, an idea that got many analysts jazzed. After a strategic review, Pfizer said it had decided to hive off the nutritionals and animal health businesses and keep its "established products" unit--aka generics--and its consumer health business. While the approach was less radical than some had predicted--or wanted--it's been lauded by those who agree it can help cushion the company against generic competition for its branded drugs.
When the company announced its overall plans, it also cautioned that details about the nutritionals and animal-health sales wouldn't be forthcoming for some time. Spokeswoman Joan Campion stuck to that line when asked about the nutritionals sale. "We're continuing to explore strategic options for our nutrition business," Campion told Bloomberg. "This process is ongoing. As we previously said, we don't anticipate making any further announcements until sometime in 2012. We expect to complete any transaction that may result from this evaluation in 12 to up to 24 months."
- read the Bloomberg story