Perrigo has announced that it is initiating a strategic review of its infant formula business.
The review will assess a full range of alternatives.
The company has said the review is aligned with its 'Three-S' (Stabilise, Streamline, Strengthen) plan and reflects its commitment to disciplined capital allocation and supporting improved return on invested capital and total shareholder return.
The review will focus on a combination of accelerating cash flows and reassessing Perrigo's previously announced investment in this business of $240m, while optimising portfolio impact and focus.
The infant formula business in 2025 is expected to generate net sales of approximately $360m, equating to less than ten per cent of Perrigo's net sales in 2024.
It has stabilised operations, is producing quality-assured formula and remains the only large-scale US store brand and contract manufacturer with a meaningful near-term innovation pipeline.
Perrigo will continue to serve parents and caregivers with safe, affordable infant formula throughout the review process.
President and CEO Patrick Lockwood-Taylor commented, "This proactive review is about discipline and ensuring the Company's portfolio is best positioned for sustainable growth and free cash flow generation."
"While our infant formula operations have stabilised, the external environment has quickly changed, making a fit with our consumer health OTC businesses less strategic."
"Whatever path we choose, our corporate priorities are clear: reduce leverage, sustain our dividend policy, continue to deliver on customer partnerships and sharpen focus on our high-potential OTC portfolio to reach more consumers and drive household penetration."
Perrigo's branded products include children's oral care brand Firefly, Mederma for scar removal and Coldrex for cough and allergy care.
The company has stated that no decision has been made, there is no definitive timetable for completing the strategic review and there is no assurance that the review will result in any changes or a transaction.
Perrigo will not provide further updates unless and until it determines that further disclosure is appropriate or required based on current facts and circumstances.