The deal for Zoetis comes as its parent Pfizer, the world's biggest drugmaker, is divesting its non-pharmaceuticals units in order to focus on its core prescription drugs business.
Last April, Pfizer sold its infant nutrition business to Nestle for $11.9 billion.
Zoetis, with annual sales of about $4.2 billion and 9,000 employees worldwide, is the largest player in the $22 billion animal health industry. It sells vaccines, diagnostics, anti-infectives and other medicines.
About two thirds of its sales are from products and services for livestock, including dairy and beef cattle, pigs, poultry and sheep. Its pet products include Revolution, a heartworm and flea-control medicine for cats and dogs, and Palladia, a cancer drug for dogs.
The business began in 1952 as the Agriculture Division of Pfizer, and has steadily grown through in-house research and almost a dozen acquisitions, including the animal health units of rival drugmakers.
French drugmaker Sanofi, Merck & Co.. and Eli Lilly have held onto their animal health units because of their dependable sales growth. Although profit margins on veterinary products are far lower than human drugs, their patent expirations are not as big a concern.
Zoetis has operations in 60 countries, including emerging markets in Asia and South America.
"As the biggest firm in the industry, Zoetis has scale that gives it significant advantages over competitors," Morningstar analyst Jim Krapfel said in a report earlier this week. "Its large product portfolio can justify an extensive salesforce and reduce distribution costs while smaller competitors must rely on expensive and less efficient distributors."
Pfizer will control roughly 80 percent of Zoetis after the IPO, which accounts for 413.9 million Class B shares. Juan Ramon Alaix, who served as Pfizer's animal health president, will be Zoetis' chief executive officer. Pfizer Chief Financial Officer Frank D'Amelio will serve as board chairman.
Large corporations like Pfizer are increasingly using spinoffs as a way to unlock value for shareholders.
In 2012, spin-offs and divestitures accounted for nearly 47 percent of all deals, the highest percentage in 20 years, according to Thomson Reuters data.
Earlier in January, Cincinnati Bell Inc spun off its data center unit CyrusOne through an initial public offering. Shares of CyrusOne are up around 12 percent since their market debut.
Last October, WhiteWave Foods spun off from dairy company Dean Foods. Shares of WhiteWave are down slightly since the offering.
"The financial engineering we see with these various spinoffs is really helping to unlock some value with larger companies," Mike Simmons, managing director and partner at HighTower Advisors, said on Thursday. HighTower manages $25 billion in client assets.
JPMorgan Chase, Bank of America/Merrill Lynch, and Morgan Stanley led the offering.
Zoetis will list its shares on the New York Stock Exchange under the symbol "ZTS."