Nestle to buy Pfizer's baby food unit for $11.8 bn

Swiss food and drink giant Nestle SA announced a deal Monday to acquire Pfizer Inc .'s infant-nutrition business for $11.85 billion in a bid to boost sales in emerging markets.

The company based in Vevey, Switzerland said the acquisition would "enhance its position in global infant nutrition" because 85 per cent of the Pfizer Nutrition unit's sales is in emerging markets, many of which have large, fast-growing populations.

The deal would particularly help Nestle to boost growth in China and maintain its position as one of the world's largest sellers of infant formula. It is subject to regulatory approval, however, and Nestle, since it already sells so much infant formula, may face some antitrust hurdles to complete the deal.

Nestle's shares fell 3 per cent to 55.30 Swiss francs ($60.71) after the Zurich exchange opened.

The maker of Nescafe, Haagen Dazs and Jenny Craig said it estimated that the Pfizer unit's 2012 sales would bring $2.4 billion.

"Infant nutrition has been at the heart of our company since it was founded in 1866," Nestle CEO Paul Bulcke said in a statement. "Pfizer Nutrition is an excellent strategic fit and this acquisition underlines our commitment to be the world's leading nutrition, health and wellness company."

Nestle's offer beat a rival joint bid by Groupe Danone and Mead Johnson Nutrition Co. for the infant-nutrition business, which Pfizer had put up for sale last July along with a separate animal-health business unit.

Pfizer, the world's largest drug maker, has been shedding its noncore businesses as it moves to focus on developing new prescription drugs. Last year it suffered the patent expiry of blockbuster drug Lipitor, the cholesterol fighter.