Published: Wed, December 19, 2018
Health Care | By Cedric Leonard

Pfizer, GlaxoSmithKline consumer healthcare merger to create over the counter drug giant

Pfizer, GlaxoSmithKline consumer healthcare merger to create over the counter drug giant

Walmsley has previously played down the idea of breaking up the group, something that a number of investors have called for over the years.

"Through the combination of GSK and Pfizer's consumer healthcare businesses we will create substantial further value for shareholders", Emma Walmsley, CEO of GSK, said.

The joint venture will be a leader in pain relief, respiratory, vitamin and mineral supplements, digestive health, skin health and will be the first or second largest consumer healthcare player in key geographies.

Within three years of closing the transaction, Glaxo intend to de-merge its consumer division, splitting the company into two separate businesses - one focused on consumer and one on pharma and vaccines.

The proposed new business will be the biggest in the world in the "over-the-counter" healthcare market, with annual revenue of £9.8 billion.

The deal will bring together Glaxo brands including Sensodyne, Voltaren and Panadol with Pfizer's Advil, Caltrate and Centrum.

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Shareholders welcomed the news and the shares jumped 7 per cent, with Jefferies analysts saying the future separation could crystallize value. Its consumer products business will be a joint venture with Pfizer, which was trying to get rid of its consumer business to focus on prescription drugs for about a year, reported the Wall Street Journal.

"We are pleased to announce this new joint venture for Pfizer Consumer Healthcare, delivering on our commitment to complete the strategic review for this business in 2018", Read said.

GSK plans divestments of some £1 billion.

Once the businesses are combined, GSK plans to separate the joint venture as an independent company.

GSK has lagged rivals in recent years in producing multibillion-dollar blockbusters and it largely sat out a spate of dealmaking by rivals under previous CEO Andrew Witty.

GSK was advised by Citi, J.P. Morgan Cazenove and Greenhill, while Centerview, Guggenheim and Morgan Stanley acted for Pfizer.

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