GlaxoSmithKline agrees consumer tie-up with Pfizer ahead of future spin-off
British drugs giant GlaxoSmithKline has agreed a tie-up with US rival Pfizer to merge their consumer healthcare divisions to create a business with combined sales of £9.8 billion.
The deal paves the way for Glaxo to break itself up to form two separate UK-based companies – one focused on pharmaceuticals and vaccines, and the other on consumer healthcare.
Glaxo said it is aiming to do this within three years of completing the consumer healthcare joint venture.
It comes after pressure from shareholders for Glaxo to spin off its consumer division.
Glaxo will own 68% of the consumer healthcare joint venture, while US firm Pfizer will own the remaining 32% stake.
The merger is set to deliver cost savings of £500 million by 2022, of which up to 25% will be reinvested in the business.
It will bring together Glaxo’s brands such as Sensodyne, Voltaren and Panadol and Pfizer’s Advil and Centrum.
Emma Walmsley, chief executive of Glaxo, said: “Through the combination of GSK and Pfizer’s consumer healthcare businesses we will create substantial further value for shareholders.”
She added: “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 (research and development) approach focused on science related to the immune system, use of genetics and advanced technologies, and a new world-leading Consumer Healthcare company.”