Pfizer Won't Split Into Two Companies, So What's Next?

The more things change, the more they stay the same.

Five years after Pfizer execs first floated the idea of splitting the big drug maker into separate companies, they have officially abandoned the plan. The notion was originally designed to excite shareholders by “unlocking” the value of its different businesses — one would produce older drugs, while another would focus on newer medicines. Still other operations may be shed at some point.

“However, over time, any potential gap between Pfizer's market valuation and an implied ‘Sum of the Parts' market valuation has closed,” Pfizer executive vice president and chief financial officer Frank D'Amelio said in a statement. A split would not enhance cash flow, but would disrupt operations, add costs, and fail to yield “incremental” tax benefits, he explained.