Pfizer to split off remaining stake in Zoetis animal health unit

Pfizer announced Wednesday that it intends to split off its remaining 80.2-percent stake in the animal health unit Zoetis. The drugmaker spun off shares in Zoetis in February via an initial public offering that raised $2.2 billion.

"We are pleased with Zoetis' performance since the IPO," remarked Pfizer CEO Ian Read, adding "given the strong demand in the IPO and a favourable market environment, we concluded that now is the appropriate time to distribute our remaining stake in Zoetis." International Strategy & Investment Group analyst Mark Schoenebaum noted that "the proceeds from the IPO plus the Pfizer share reduction from this exchange will more than offset the lost income from Zoetis." The analyst indicated that the move occurred sooner than expected, but it should positively benefit the drugmaker by adding to its earnings next year.

Under the exchange offer, Pfizer shareholders will be able to obtain Zoetis shares at a 7 percent discount, so that for each $100 of Pfizer shares accepted, shareholders would receive about $107.52 of Zoetis shares. The company noted that the final exchange ratio will be announced on June 19, when the exchange offer is scheduled to end.

In June last year, Pfizer announced plans to spin off its animal health unit into a standalone business as part of Read's strategy to divest non-core businesses and refocus the company on pharmaceutical development. The drugmaker had previously agreed to sell its infant nutrition business to Nestle for about $11.9 billion. The reorganisation has fuelled speculation that Pfizer will also split its branded and generic businesses into separate companies.

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