ZTS · 10-Q · 2026Q3 · Full report

Convertible Senior Notes

Zoetis Inc. · 2026-11-05 · Importance 71 · Surprise 60

On December 18, 2025, Zoetis completed a $2.0 billion offering of 0.250% convertible senior notes due June 15, 2029, receiving net proceeds of $1,970 million after $30 million of discounts and expenses. The notes have an initial conversion price of approximately $148.20 per share. Zoetis used $187 million of proceeds for capped-call transactions and $248 million to repurchase approximately 2.1 million shares, then used the remaining $1,535 million for repurchases of 12.3 million additional shares completed by March 31, 2026. The capped calls cover approximately 13.5 million shares and have an initial cap price of approximately $211.72 per share.

Key facts

• Zoetis completed a private offering of 0.250% convertible senior notes on December 18, 2025, with $2.0 billion aggregate principal amount and maturity on June 15, 2029, unless earlier repurchased, redeemed or converted. source
• Zoetis used the remaining $1,535 million of offering proceeds to repurchase 12.3 million common shares, completing those repurchases by March 31, 2026. source
• Zoetis entered into capped calls with an initial strike price of approximately $148.20 per share and initial cap price of approximately $211.72 per share, covering approximately 13.5 million common shares. source
• Zoetis used $187 million of the convertible-note proceeds to fund capped call transactions and $248 million to purchase approximately 2.1 million common shares in privately negotiated transactions. source
• Net proceeds from the convertible-note offering were $1,970 million after $30 million of initial purchasers’ discounts and expenses. source
• The convertible senior notes have an initial conversion price of approximately $148.20 per Zoetis common share. source
• The convertible notes become freely convertible by holders on or after March 15, 2029, regardless of the earlier conversion conditions. source
• The capped calls are generally intended to reduce or offset potential dilution upon conversion of the convertible notes, but dilution or unoffset cash payments could remain to the extent the stock price exceeds the cap prices. source