Nestle and Danone competing to purchase Pfizer's Infant Nutrition Unit

The two companies are reportedly seen as the frontrunners after the first round of bidding for Pfizer’s infant nutrition business which is estimated to be worth about $US10billion

Pfizer announced the ongoing process of exploring strategic alternatives for its Nutrition business, along with its Animal Health business, in early July 2011. The company wants to focus on its core biopharmaceutical products. It  of exploring strategic alternatives for its   and was considering options including, among others, a full or partial spin-off the businesses, sale or other transactions.

It is reported that Pfizer could still look to spin-off the business into its own separate company, if it fails to fetch the price it's seeking for the unit.

Pfizer is the second-largest infant nutrition business after market leader Nestle

Pfizer Nutrition, formerly Wyeth Nutrition, develops premium-quality nutritional products that are scientifically designed to help meet the needs of infants and young children up to seven years old, as well as pregnant and lactating mothers.

The business has operations on six continents, products available in more than 60 countries, and a focused presence in key markets throughout Asia, the Middle East, Europe and Latin America, with China, Philippines, the U.K., Mexico and Australia being among its top markets. Its manufacturing facilities are located in China, Ireland, Mexico, the Philippines, and Singapore.

Both Nestle and Danone are expected to face antitrust issues in some markets if they acquire the unit as, with this acquisition, Nestlé would hold more than 60% market share for baby formula in Australia, Mexico and other countries, while Danone would capture 80% market share in the UK, Turkey and New Zealand and more than 70% in Australia and Ireland.

Pfizer gained the baby food unit, which posted sales of $1.9bn in 2010, through its acquisition of Wyeth in 2009.