GSK inks $12.7bn consumer healthcare deal with Pfizer

GSK, Pfizer to merge consumer healthcare units.

Pfizer Inc. and GlaxoSmithKline plc announced they have entered into an agreement to create a premier global consumer healthcare company with robust iconic brands. The Boards of Directors of both companies have unanimously approved the transaction under which Pfizer will contribute its consumer healthcare business to GSK’s existing consumer healthcare business.

The 2017 global sales for the combined business were approximately $12.7bn. The deal which gives GSK 68% of the combined entity, brings together products such as Panadol and Advil, Sensodyne, Voltaren, Centrum. The transaction is expected to deliver $650m in peak cost synergies and to be slightly accretive for Pfizer in each of the first three years after the close its closing. The joint venture will be a category leader in pain relief, respiratory, vitamin and mineral supplements, digestive health, skin health and therapeutic oral health and will be the largest global consumer healthcare business. In addition, the joint venture is expected to be the first or second largest consumer healthcare player in key geographies, including the United States, Europe, China, India and Australasia. The joint venture will operate globally under the GSK Consumer Healthcare name.

Following the integration of the combined business, GSK intends to separate the joint venture as an independent company via a demerger of its equity interest to its shareholders and a listing of the Consumer Healthcare business on the UK equity market. GSK will have the sole right to decide whether and when to initiate a separation and listing for a period of five years from closing of the proposed transaction. GSK may also sell all or part of its stake in the joint venture in a contemporaneous IPO.

 

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