Pfizer Inc’s move to offload its consumer-health division could bring in billions of dollars and help the drugmaker streamline operations. However, the company-changing deal that investors have been hoping for might be still to come.
The US drug giant, which abandoned a plan to split in two last year, has tried — and failed — to orchestrate mergers of hundred billion dollars or more that would have allowed it to move its address overseas to secure a lower tax rate.
Now, with tax reform being debated in the US Congress, Pfizer could consider another large deal to bolster its development pipeline.
“They have not been shy about discussing the possibility of transformative M&A [mergers and acquisitions] along with smaller deals too,” Edward Jones & Co analyst Ashtyn Evans said. “If they think it can create value for their shareholders, I think they’ll go for it. We’ve seen them look at big deals in the past, and we think they’ll continue to consider big deals.”
Pfizer’s consumer unit, with sales of US$3.4 billion last year, markets well-known brands including the over-the-counter pain pill Advil, ChapStick lip balm and the dietary supplement Centrum.
It could sell or spin off all or part of the business, the drugmaker said in a statement on Tuesday.
Pfizer is to report its earnings later this month, and the plan to sell the division will almost certainly still be a topic.
There are several potential buyers who could value the unit at around US$13 billion to US$17 billion, Berenberg analyst Rosie Edwards said, adding in her note that companies like Reckitt Benckiser Group PLC, Nestle SA, GlaxoSmithKline PLC, Johnson & Johnson and Sanofi could be interested.
Pfizer has trailed other drug companies because it has not developed blockbusters as quickly as its top sellers have lost their patents, she said.
Earlier this year, Pfizer chief executive officer Ian Read said the lack of clarity on tax reform as a key factor in restraining deal activity.
“We will continue to evaluate deals,” he said. “We never say ‘never,’ but I believe the current environment needs to stabilize in order to be an advantageous market for big deals.”
Pfizer’s consumer-health division has 10 brands, each with more than US$100 million in last year sales, and its revenue rose 5 percent last year. The firm has been rebuilding in over-the-counter drugs since selling off a consumer health business in 2006.
Polytronics Technology Corp (聚鼎科技) yesterday announced that it is buying Henkel AG’s thermal clad dielectric material (TCLAD) business division for US$26 million as the Taiwanese firm aims to improve its technology, product portfolio and revenue performance. Polytronics, headquartered in the Hsinchu Science Park (新竹科學園區), is a supplier of protection components and heat dissipation materials. The firm entered the metallic heat-dissipation substrate market in 2007 and developed a unique solventless production process. Its board of directors approved signing an agreement with Henkel to acquire the German chemical firm’s TCLAD division in the US. The purchase includes all assets and business interests, including equipment,
SIZE MATTERS: Medium-sized hotels that do not have the support of parent groups are more vulnerable and are forced to take action, a REPro Knight Frank researcher said About 50 hotels across Taiwan are seeking to exit the market as they succumb to the bleak business outlook amid international travel restrictions imposed to combat the COVID-19 pandemic. Yomi Hotel (優美飯店) on Minsheng E Road, Sec 1, in Taipei is seeking to transfer ownership with an asking price of NT$950 million (US$32.15 million) and a pledge for a lease contract that guarantees a 3 percent return. The budget hotel, with room rates that start from NT$1,400 per night, maintains normal operations, but has been struggling since March, when the government placed restrictions on inbound and outbound travel. Occupancy rates for hotels in
With the US dollar expected to weaken in the next 12 months due to near-zero interest rates, investors should consider purchasing US corporate bonds, Standard Chartered Bank Taiwan Ltd (渣打台灣銀行) said on Thursday. The bank said that the US Federal Reserve since last month has been buying bonds issued by US companies to curb default rates. The US dollar is forecast to be weaker against the pound, the euro and the yen, as well as the Canadian dollar, the Swedish krona and the Swiss franc, as the greenback lacks high investment returns after the Fed in March slashed the benchmark interest rate
‘SENSITIVE MARKETS’: The previously unannounced project would involve the company handing over control of data to a third party to sidestep privacy concerns Google has abandoned plans to offer a major new cloud service in China and other politically sensitive countries due in part to concerns over geopolitical tensions and the COVID-19 pandemic, two employees familiar with the matter said, revealing the challenges for US tech giants to secure business in those markets. In May, the search giant shut down the initiative, known as “Isolated Region” and which sought to address nations’ desires to control data within their borders, the employees said. The action was considered a “massive strategy shift,” said one of the employees, who added that Isolated Region had involved hundreds of employees