By Jeffrey McCracken and Drew Armstrong - Wed Apr 18 09:53:52 GMT 2012

Pfizer said that no decisions have been made on the animal-health and infant-nutrition businesses.

Pfizer said that no decisions have been made on the animal-health and infant-nutrition businesses. Photographer: Munshi Ahmed/Bloomberg

Pfizer Inc. (PFE) may select a buyer for its infant-nutrition unit as soon as next week after receiving bids from Nestle SA (NESN) and Danone SA (BN), according to people with knowledge of the matter.

Nestle and Danone each submitted final offers of about $10 billion for the business, said the people, who declined to be identified because the discussions are private. Other consumer companies and private-equity firms are also involved in the auction because they may alleviate the antitrust risk for the bidders, one person said yesterday.

Danone and Nestle have been working on ways to overcome antitrust hurdles, people familiar with the matter said in February. At that time, Nestle was considering buying all of Pfizers infant-nutrition assets and then conducting an auction to sell what it cant keep because of regulatory concerns it would become too dominant in some markets, one person said. Danone was weighing a joint bid with Mead Johnson Nutrition Co. (MJN), the people said then.

This deal makes huge strategic sense for Nestle, Andrew Wood, an analyst at Sanford C. Bernstein, wrote today in a note to clients. It is in the right categories and the right markets and with a reasonable price we would expect a fairly positive reaction from investors.

The companies talks with Pfizer could still break down and a deal may not be reached.

Danone has told outsiders it is unlikely to win the auction and Nestle may be the final bidder, said a person familiar with the matter. Pfizer has continued to speak to Danone and is trying to keep them in the process as bids are evaluated, the person said. A third bidder that was in the running is no longer in the auction, the person said.

Pfizer, based in New York, also is planning an initial public offering for its animal-health unit and has hired JPMorgan Chase & Co., Bank of America Corp. and Morgan Stanley to handle that sale, one person said. The Wall Street Journal reported earlier yesterday on Pfizers plans.

Excerpt from:
Pfizer Said to Pick Nutrition Unit Buyer as Soon as Next Week