Pfizer Restructures Indian Animal-Health Unit to Prepare for Consolidation

By Drew Armstrong – Bloomberg

Pfizer Inc. (PFE), the world’s largest drugmaker, said it will incorporate its Indian subsidiary’s animal health unit into its larger animal division, signaling the company is progressing in its intention to divest the business.

The action is a step toward worldwide consolidation of New York-based Pfizer’s animal health operations under one roof, the company said. The change was announced in a statement today by the Bombay Stock Exchange.

Pfizer is shedding its animal health and nutrition businesses this year as part of Chief Executive Officer Ian Read’s plan to focus on developing new drugs. The reorganization will let potential buyers or investors assess the business unit as a whole, said Scott Rostan, chief executive office of Training the Street, a New York company that trains finance professionals, and a former M&A banker.

“This is going to be part of the final stages of them getting serious,” Rostan said in a phone interview. “This would be a clear indication that they’re proceeding forward.”

No decisions have been made as to whether the unit will be sold, spun off or divested in some other way, said Joan Campion, a Pfizer spokeswoman.

“In order for any potential transaction with animal health, in some countries the business needs to be separated out from the legal entity that’s there,” she said today in a telephone interview

The animal health unit had $3.58 billion in sales in 2010. Its Asian operations, of which the India subsidiary is part, were responsible for 14 percent of that total, or about $500 million, according to a company presentation.