Zoetis Announces Proposed $1.75 Billion Convertible Senior Notes Offering

Zoetis Inc. (NYSE: ZTS) (the “Company” or “Zoetis”) today announced that, subject to market conditions, it intends to offer $1.75 billion aggregate principal amount of convertible senior notes due 2029 (the “Notes”) in a private offering to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A of the Securities Act of 1933, as amended (the “Securities Act”). Zoetis also intends to grant the initial purchasers of the Notes an option to purchase, for settlement within a 13-day period beginning on, and including, the date on which the Notes are first issued, up to an additional $250 million aggregate principal amount of Notes.

Zoetis intends to use the net proceeds from the offering (i) to fund the cost of the capped call transactions described below; (ii) to purchase shares of Zoetis’ common stock, par value $0.01 per share, in privately negotiated transactions entered into concurrently with the pricing of the offering effected with or through one of the initial purchasers or its affiliate; and (iii) the remainder for additional repurchases of shares of Zoetis’ common stock after the offering, which the Company expects to complete by no later than the first quarter of 2026.

If the initial purchasers exercise their option to purchase additional Notes, Zoetis expects to use a portion of the net proceeds from the sale of the additional Notes to enter into additional capped call transactions, and to use the remainder of such net proceeds for additional repurchases of common stock following the date of the offering. All share repurchases will be conducted pursuant to the Company’s existing $6 billion share repurchase program, may be made on the open market or in privately negotiated transactions and may be made pursuant to a Rule 10b5-1 plan or otherwise.

The Notes will be senior, unsecured obligations of Zoetis, will accrue interest payable semi-annually in arrears and will mature on June 15, 2029, unless earlier redeemed, repurchased or converted. Upon any conversion of the Notes, Zoetis will pay cash up to the aggregate principal amount of the Notes to be converted and pay or deliver, as the case may be, cash, shares of Zoetis’ common stock or a combination of cash and shares of Zoetis’ common stock, at Zoetis’ election, in respect of the remainder, if any, of Zoetis’ conversion obligation in excess of the aggregate principal amount of the Notes being converted.