Pfizer Receives $14 Billion in Bids for Consumer Unit

Pfizer Receives $14 Billion in Bids for Consumer Unit

Pfizer Receives $14 Billion in Bids for Consumer Unit

Pfizer received bids worth more than $14 billion for its consumer products unit, which includes household names like Listerine and Sudafed, people involved in the auction said yesterday.

The offers, these people said, came from some of the company's big rivals like GlaxoSmithKline and Johnson & Johnson, as well as a British household cleaning products maker, Reckitt Benckiser.

Pfizer announced in February that it would try to sell its consumer products unit in an effort to refocus its efforts on its most profitable business line, prescription drugs.

The consumer unit had $3.9 billion in sales last year, a 10 percent increase from 2004, and an operating profit of $670 million, Pfizer said.

The auction set off a scramble among drug makers and consumer products manufacturers, as well as private equity investors seeking Pfizer's assets.

Consumer companies like Procter & Gamble and most private equity firms eventually passed on bidding in the auction because the asking price was too high, but the people involved in the auction said that yesterday's bids still illustrated how much interest there was in big consumer brands.

And while Pfizer is prepared to jettison its consumer business, the likes of Glaxo and Johnson & Johnson still seem to believe that consumer products are an important part of their offerings.

Yesterday's bids are expected to set the stage for a fierce contest over the next several weeks as the field is narrowed before a final round of offers is made and a winner is decided.

The plan to sell the unit is one of several steps that Pfizer is taking to bolster its flagging stock price, including increasing its dividend and trying to streamline its operations.

Analysts have said that spinning off the consumer unit will be another step in pleasing Wall Street, because investors view the division as outside Pfizer's core business of prescription drugs.

The unit accounted for less than 8 percent of Pfizer's $52 billion in sales last year, and about 4 percent of operating profit.

Some of the unit's other prominent products include Rolaids antacid, Benadryl allergy medicine, Rogaine baldness treatment, Zantac antacid, Bengay analgesic and Lubriderm skin lotion.

The unit's nine brands have than $100 million in annual sales, according to Pfizer.