Leading healthcare and pharmaceuticals firm GlaxoSmithKline (GSK) and Pfizer have announced plans to merge their respective consumer health businesses in a move that will see GSK separate to create two new global companies.
GSK said it would have a majority controlling equity interest of 68% in the joint venture, which has combined sales of approximately £9.8 billion ($12.7 billion) and will bring brands such as Sensodyne, Voltaren and Panadol together with Advil, Centrum and Caltrate.
According to GSK, the joint venture will be a category leader in pain relief, respiratory, vitamin and mineral supplements, digestive health, skin health and therapeutic oral health. It will also be the global leader in OTC products with a market share of 7.3% and have number 1 or 2 market share positions in all key geographies, including the US and China, the company added.
GSK claimed the proposed all-equity transaction represented “a compelling opportunity” to build on the recent buyout of Novartis’ stake in GSK Consumer Healthcare.
Commenting on the deal, GSK CEO Emma Walmsley said: “Eighteen months ago, I set out clear priorities and a capital allocation framework for GSK to improve our long-term competitive performance and to strengthen our ability to bring new breakthrough medicines and better healthcare products to people around the world”.
“The transaction we have announced today is a unique opportunity to accelerate this work”, she added. “Through the combination of GSK and Pfizer’s consumer healthcare businesses we will create substantial further value for shareholders. At the same time, incremental cashflows and visibility of the intended separation will help support GSK’s future capital planning and further investment in our pharmaceuticals pipeline”.
Source: GlaxoSmithKline