GSK and Pfizer Merge Consumer Healthcare Businesses

Pfizer and GlaxoSmithKline (GSK) announced on Dec. 19, 2018 that the companies will merge their consumer healthcare products businesses and form a separate consumer-focused company with an estimated $12.7 billion in sales. GSK will have a 68% stake in the joint venture; Pfizer will hold 32%.

When announcing the transaction, GSK announced its intent to spin off the consumer healthcare business and listing it as a public company in the United Kingdom within three years.

GSK noted in a statement that the proposed transaction is part of a strategy to focus on prescription drugs and vaccines.

“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. We have improved our operating performance and have set out a new approach to R&D. We have also started to reshape the Group’s portfolio through prioritization of R&D programs, acquisitions such as that proposed with the oncology biopharmaceutical company, TESARO, the minority buy-out of the consumer healthcare business, and a series of non-core product divestments,” said Emma Walmsley, chief executive officer, GSK, in a statement.

“With our future intention to separate, the transaction also presents a clear pathway forward for GSK to create a new global Pharmaceuticals/Vaccines company, with an R&D approach focused on science related to the immune system, use of genetics and advanced technologies, and a new world-leading Consumer Healthcare company,” she continued.

“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,” stated Ian Read, chairman and current chief executive officer, Pfizer, in a statement. “Pfizer and GSK have an excellent track record of creating successful collaborations, and we look forward to working together again to unlock the potential of our combined consumer healthcare businesses.”

The all-equity transaction, subject to approval by shareholders anti-trust authority approvals, is expected to close in the second half of 2019.

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