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Bristol-Myers, Mead Johnson unveil split-off plan
November 16th, 2009
NEW YORK – Bristol-Myers Squibb Co. plans to split off its holdings in former subsidiary Mead Johnson Nutrition Co. through a stock swap.
The maker of Enfamil infant formula and other pediatric nutrition products, Mead Johnson completed an initial public offering in February. Bristol-Myers unveiled the spin-off last year, saying that it wants to concentrate on its biopharmaceuticals business.
Under the split-off plan, announced late Sunday, Bristol-Myers shareholders can exchange some, all or none of their shares for Mead Johnson stock at a discount and tax-free. For each $1 of Bristol-Myers common stock, the tendering shareholder receives $1.11 of Mead Johnson common stock.
Bristol-Myers owns roughly 83% of Mead Johnson's stock. The exchange offer is scheduled to expire on December 14.
"This marks the latest step in our company's transformation into a biopharma leader," Bristol-Myers chairman and chief executive officer James Cornelius said in a statement. "By executing our health care divestment strategy, we have sharpened our biopharma focus, improved the overall financial strength of the company and supported our ability to pursue strategic business development opportunities. All of these actions help us fulfill our mission to discover, develop and deliver innovative medicines to help patients prevail over serious diseases."
Cornelius added, "Now is the right time to move forward with a split-off given the excellent performance of Mead Johnson since the IPO earlier this year and our confidence in the current and future performance of our biopharmaceuticals business. With a successful execution of this split-off, we fully consider ourselves a biopharma company."
Mead Johnson CEO Stephen Golsby commented that the transaction marks "the important final step in our journey to be a fully independent public company."
"We believe the decision to split off Mead Johnson reflects confidence in the success of our growth strategy and our strong financial performance since our IPO in February, as well as Bristol-Myers Squibb's objective to focus on their core biopharma business," Golsby stated.