New York - Pfizer Inc., the world's biggest drugmaker, plans to buy back as much as $10 billion of stock during the next 24 months, its largest repurchase ever, and will seek buyers for its Adams candy and Schick shaving units.
Pfizer, best known for the Viagra impotence drug, is considering unloading two businesses picked up in its June 2000 purchase of Warner-Lambert Co. Adams, maker of such brands as Chiclets, Certs and Halls, had sales of $1.96 billion and Schick $620 million last year, the company said in a statement.
Cash-flush pharmaceutical companies have been buying back shares and shedding lower-profit consumer lines to help bolster sagging stock prices. Pfizer shares, which have fallen 10 percent this year, rose $1.74 to $36.74. Johnson & Johnson in February announced its biggest-ever buyback, and last year Bristol-Myers Squibb Co. sold its Clairol beauty-care unit.
"Pfizer has generated a lot of cash, and there aren't that many companies that can do a $10 billion buyback," said John Schroer, founder of Itros Capital Management, which oversees more than $200 million in health-care stocks and owns Pfizer shares.
The New York-based company had $32.2 billion in total sales. Last year Pfizer generated $9.3 billion in cash from operations. Pfizer just completed a 120 million-share repurchase program authorized in June 2001, spending $4.8 billion.
The company is considering selling the Adams candy business and Schick-Wilkinson Sword shaving unit, a move investors have been expecting. Pfizer had to wait until two years after the Warner-Lambert purchase to put the units up for sale to avoid taking goodwill charges in connection with the takeover.
Nestle SA, the world's biggest food maker, might look at Pfizer's Adams sweets and gums business if it goes up for sale, Nestle Chief Executive Peter Brabeck said this month.
Another potential bidder for Adams is Cadbury Schweppes Plc, the world's fourth-biggest confectioner, analysts have said.
Potential bidders for the shaving business include Procter & Gamble Co. and Colgate-Palmolive Co., said Tony Butler, an analyst at Lehman Brothers.
Societe Bic SA, the world's biggest maker of disposable pens and lighters, would be interested in buying Pfizer's Schick unit, Chief Executive Officer Bruno Bich said in an interview with the Investir financial weekly in March.