Drug giant Pfizer Inc. (PFE) Wednesday said it will spin-off its majority stake in animal health business Zoetis Inc. (ZTS) through an exchange offer. Pfizer shareholders will be offered exchange of their Pfizer stock for Zoetis shares at a 7 percent discount.
Pfizer had sold about 20 percent of Zoetis common stock in an initial public offering in February, which raised about $2.2 billion. Pfizer now thinks its right time to shed the remaining 80 percent of stake in Zoetis.
Chief Executive Ian Read said, "We are pleased with Zoetis's performance since the IPO in February. Given the strong demand in the IPO and a favorable market environment, we concluded that now is the appropriate time to distribute our remaining stake in Zoetis."
The spin-off will help Pfizer lower its outstanding shares and improve shareholder returns through share buybacks. The exchange is also in accordance with Pfizer's strategy to focus more on developing new drugs for humans.
"We expect that this exchange offer will continue to deliver value to Pfizer shareholders by reducing the number of our outstanding shares in a tax-efficient manner. At the same time, we believe that this transaction better positions Pfizer to focus on our core business as an innovative biopharmaceutical company," Read added.
The exchange offer is anticipated to be tax-free for Pfizer shareholders in the US, except with respect to cash received in lieu of a fractional share. The completion of the full separation of Zoetis is expected to be accretive to Pfizer's earnings per share beginning in 2014.
The Pfizer shares will be exchanged at a 7 percent discount subject to an upper limit of 0.9898 shares of Zoetis stock per Pfizer share. If the limit is not in effect, $100 in Pfizer shares will be worth $107.52 of Zoetis.
The final exchange ratio will be announced on June 19, 2013, unless the exchange offer is extended or terminated, Pfizer said.
PFE is currently trading at $29.61, up $0.83 or 2.88%, on the NYSE. ZTS is currently trading at $32.83, down $0.21 or 0.62%, also on the NYSE.
For comments and feedback contact: editorial@rttnews.com
Business News
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.