Pfizer Inc. said Monday that it is selling its Coty fragrance and cosmetics business for $440 million to Joh. A. Benckiser, a German consumer products company.
Coty markets fragrances and cosmetics in mass merchandise outlets and drugstores throughout North America. It accounted for about $280 million of Pfizer's $6.95 billion in sales last year.
Among Coty's women's fragrances are Emeraude, Exclamation, Lady Stetson, L'Effleur, Sand & Sable and Wild Musk. Its men's fragrances include Stetson and Preferred Stock.
Analysts said Pfizer's plan follows a prescription used successfully by other pharmaceutical firms that have sold off their cosmetic units:
* Eli Lilly & Co. sold Elizabeth Arden.
* Schering-Plough sold Maybelline.
* Squibb, now Bristol-Myers Squibb Co., sold Charles of the Ritz.
Pfizer's agenda is to focus on its health care businesses.
"There seems to be a general restructuring going on industrywide, with a higher concentration on better-margin health care and pharmaceutical products," said analyst Ronald Nordmann of PaineWebber Inc. "It has been a successful strategy."
"The divestiture of Coty by Pfizer is long overdue," said Samuel Isaly, a partner with the securities firm Mehta & Isaly, which specializes in pharmaceutical stocks. Pfizer, like other large pharmaceuticals, has not been an effective seller of cosmetics, he said.
"At least half a dozen pharmaceuticals acquired cosmetic businesses and failed," Isaly said.
Pfizer does not disclose profits at Coty, part of its consumer products group. Analysts say it is a lower-margin business than the pharmaceutical and health care units.
"We are receiving a fair price for Coty," New York-based Pfizer said. It said it will benefit from the sale "by allowing our management team to focus more attention on the business strategy for our main health care business."
"A key component of that strategy is to keep--and build--the rest of our consumer products business, which is based on over-the-counter medications and includes such prominent brand names as Ben-Gay, Visine, Desitin, Unisom and other market leaders," the company said.
Pfizer spokesman A. A. Biesada said the company did not seek to sell Coty, but Benckiser offered a price it couldn't refuse.
Benckiser, a privately held consumer products company based in Ludwigshafen, Germany, has been trying to expand its U.S. market presence.