Nestle strikes $11.5bn deal to acquire Pfizer Nutrition
In a bid to enhance its presence in the infant food segment, Swiss food major Nestle has agreed to pay $11.85 billion to acquire Pfizer Nutrition, which has a strong presence in high-growth markets.
"Pfizer Nutrition is an excellent strategic fit and this acquisition underlines our commitment to be the world's leading nutrition, health and wellness company," Nestle chief executive Paul Bulcke said in a statement Monday.
Stating that the acquisition would "complement our existing infant nutrition business perfectly."
The acquisition, which is subject to regulatory approval, is expected to help Nestle chalk higher growth and improve margins in the full first year. Pfizer generates about 85 per cent of its sales from emerging markets.
Nestle estimates that Pfizer Nutrition's sales would reach about $2.4 billion in 2012.
There has been considerable speculation in the past few weeks about Nestle being on the lookout for an acquisition in view of its healthy kitty since the sale of eye-care major Alcon to Novartis in 2010 for $51.6 billion.
"The combined entities will enable us to deepen our engagement with consumers, offering them a wider choice of nutritious food," said Bulcke.
Infant nutrition performed well globally to record approximately $2.1 billion revenues in 2011, an increase of 15% over the previous year.
"The sale of the Nutrition business to Nestl 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 in a statement.
Pfizer expects the divestiture of the Nutrition business will be completed by the first half of 2013, assuming the receipt of the required regulatory clearances and satisfaction of other closing conditions.
Upon completion of the transaction, all Pfizer staff currently dedicated to the Nutrition business will be transferred to Nestl, subject to works council and union consultation where required.
Source: Europe News.Net
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