August 8, Swiss food giant Nestle SA is reportedly planning to buy the formula milk powder unit of Wyeth LLC, a subsidiary of drug maker Pfizer Inc.

Xi Qing, director of public relations at Pfizer China, told the National Business Daily that the company was planning to spin off is animal health and nutrition divisions to focus more on its bio-pharmaceutical business.

Wyeth’s formula milk power unit is a major component of Pfizer’s nutrition business, Xi said.

Xi said market rumors that Pfizer was planning to fully offload Wyeth were untrue, and that the world’s largest maker of drugs would retain Wyeth’s bio-pharmaceutical business.

Xi declined to comment when he was asked whether Nestle would be a possible buyer. Nestle also declined to comment on the matter.

Nestle

In July, Nestle agreed to buy a 60% stake in Singapore-based confectioner Hsu Fu Chi International Ltd. (SIN:AS5) for $1.66 billion to boost its growth in the country. The deal still needs approval from Chinese regulators.

Foreign brands including Dumex, Mead Johnson, Nestle, Abbott Laboratories and Wyeth have seized more than 50% of China’s formula milk powder market.

Any play by Nestle for Wyeth’s milk powder business would be investigated by the Ministry of Commerce under China’s anti-monopoly law, the National Business Daily said.

Industry analysts told the National Business Daily that such a deal for Nestle would fit with its global expansion strategy, and would also boost its share of the milk powder market if successful.