Nestle SA and Danone SA made first- round bids for Pfizer Inc.'s baby-formula unit, putting two of Europe's's largest food companies in competition for the division, reports Bloomberg.
Another option for Pfizer is tax-free spinoff, which might be better for investors. The sale of the infant-nutrition business, whose revenue approached $2 billion in 2010, would allow CEO Ian Read to focus more on medicine development at Pfizer, whose drugs include the Lipitor cholesterol pill. Many drugmakers are seeking fresh sources of revenue as their patents on top-selling drugs expire, allowing copycats to enter the market with cheaper generic versions. Through 2015, medicines that generate $171 billion in sales globally will lose patent protection, according to Gary Gatyas, a spokesman for IMS Health in Parsippany, N.J., which tracks the industry.