Pfizer has sold its nutrition business to Nestle, after the latter beat off competition from Danone, tightening its focus on pharmaceuticals.

The New York-based behemoth is getting $11.85 billion in cash for the unit,  which specialises in baby food and infant formula and had revenues of $2.10 billion last year, an increase of 15% versus 2010. Over 70% of the total came from emerging markets, and a quarter of the latter is made up of sales in China.

Pfizer chief executive Ian Read said that following the completion of this divestiture, "we expect to allocate the after-tax proceeds to further share repurchases, or invest in other business-development opportunities, with the return on share repurchases remaining our case to beat". The figure paid is almost $2 billion more than most analysts expected and Danone, in a joint bid with Mead Johnson, reportedly upped its offer last week.

Last July, Pfizer also said it was looking at alternatives for its animal health operations, including a sale. However it has been reported that the firm has hired JPMorgan Chase & Co, Bank of America Merrill Lynch and Morgan Stanley to look at a possible initial public offering of the division, which had sales last year of about $3.40 billion.