Pfizer says it won't split into two

Following an extensive evaluation, Pfizer has decided not to split the company into two separate publicly-traded groups.

The US pharmaceutical firm said the board of directors and executive leadership team have determined that Pfizer is best positioned to maximise future shareholder value creation in its current structure.

Chairman and chief executive Ian Read said: “With this decision, our two distinct businesses will remain separately managed units within Pfizer, which we believe is currently the best structure to continue to deliver on our commitments to patients, physicians, payers and governments, and to drive value for our shareholders.

“We believe that by operating two separate and autonomous units within Pfizer we are already accessing many of the potential benefits of a split – sharper focus, increased accountability, and a greater sense of urgency – while also retaining the operational strength, efficiency and financial flexibility of operating as a single company as compared with operating as two, separate publicly traded companies. We will continue to generate the financial information necessary to preserve our option to split our businesses should factors materially change at some point in the future.”

Pfizer had previously indicated that the process for making a decision was guided by criteria that included evaluating the performance of each business within Pfizer, determining if each business could compete as a stand-alone entity, assessing if trapped value existed in a combined entity and if any trapped value could be unlocked efficiently.

In addition, the group assessed whether key strategic and operating imperatives could best be achieved in the current structure versus two, separate publicly traded companies.

“Both the Innovative Health and Essential Health businesses have delivered solid year-over-year performance over the course of the past three years, as well as strong performance through the first half of 2016, demonstrating their ability to compete on a standalone basis,” it said.