Bristol-Myers to divest Mead Johnson for $7.69 billion

Bristol-Myers Squibb (BMS) said yesterday that it will split off its holdings in Mead Johnson Nutrition Company- the maker of infant and children's nutrition in a deal valued approximately $ $7.69 billion in order to focus on its core biopharmaceutical business.

The New York-based biopharmaceutical company, which owns about 83 per cent of Mead stock, expects the split-off to be a tax-advantaged way to further deliver value to BMS shareholders. The split-off is expected to be net cash flow positive to the BioPharma business and accretive to earnings per share beginning in 2010.

In the exchange offer, BMS shareholders can exchange some, none or all of their shares of BMS common stock for shares of Mead Johnson common stock. The exchange is generally expected to be tax-free to participating shareholders.

As part of the exchange offer, BMS will convert all of its Mead Johnson class B common stock into Mead Johnson class A common stock. Upon the completion of the exchange offer, only Mead Johnson class A common stock will remain outstanding, said the company in a press release.

In 2008, BMS had decided to spin off Mead Johnson in order to focus on biopharmaceuticals and acquiring biotech drug companies. Glenview, Illinois-based Mead, which had 2008 sales of nearly $2.6 billion, is the maker of children's nutritional products, including Enfagrow, Enfapro, Enfakid, EnfaSchool, and Sustagen in Asia, and Choco Milk and Cal-C-Tose in Mexico and Latin America.

Mead Johnson, founded more than 100 years ago has a global workforce of approximately 5,600 people, and manufactures and markets more than 70 products in over 50 countries in North America, Latin America, Europe, and Asia-Pacific. It operates major manufacturing facilities in every region where it conducts business.