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Pfizer considers sale of OTC division

Published on 08/02/06 at 02:45pm

Pfizer says it is considering selling off its consumer medicines division as part of a new drive to improve flagging profits and sales in its business.

Pfizer's overall sales fell 2% in 2005, with profits down 7%. The company says it is considering all options for the OTC business, but the sale could fetch a high price and improve the company's overall profitability in the long term.

Pfizer Consumer Health (PCH) markets a number of major global consumer products such as Listerine mouthwash, Sudafed cold remedy and Bengay pain ointment.

The division earned $3.8 billion in 2005, sales rising 10%, and found itself in the unusual position of outstripping performance in the prescription business, which saw sales dip 4%.

In the long-term, however, the OTC business is not expected to maintain its growth, and its sale could help Pfizer could bring in as much as $10 billion, and leave the remaining business with superior profitability.

"The objective of the review is to unlock the value of the business for Pfizer shareholders at a time when market valuations are attractive for large, high-quality consumer businesses," the company said in a statement.

"PCH is a leading global consumer healthcare business with a portfolio of well-known, growing brands."

If Pfizer decides to sell, it will continue a recent spate of divestments in the market.

Last year Bristol Myers Squibb sold its OTC business to Novartis for $660m, while Reckitt Beckinser bought Boots consumer medicines for just under 2 billion.

Pfizer says it will provide further details of its plans during its 10 February investor meeting.

 

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