GSK completes Pfizer transaction to form new consumer healthcare JV

01 Aug 2019 --- GlaxoSmithKline (GSK) has completed its transaction with Pfizer to combine their consumer healthcare businesses into what they tout as a “world-leading joint venture.” This unites two highly complementary portfolios of consumer health brands, including GSK’s Sensodyne, Voltaren and Panadol and Pfizer’s Advil, Centrum and Caltrate. The venture is expected to realize annual cost savings of £0.5 billion (US$06bn) by 2022 for expected total cash costs of £0.9 billion (US$1bn) and non-cash charges of £0.3 billion (US$0.3bn). Up to 25 percent of the cost savings are intended to be reinvested in the business to support innovation and other growth opportunities.

Underpinned by science-based innovation, it is the global leader in over-the-counter products and has number one or two market share positions in all key geographies, including the US and China.

“Now the deal has closed, our focus will be on completing the integration of these two businesses and leveraging their combined strength,” says Brian McNamara, CEO, GSK Consumer Healthcare.

“With our portfolio of science-based brands and strong talent and capabilities, we are well-positioned to create a world-leading consumer healthcare business with stronger sales, cash flow and contribution to earnings.”

As previously announced, GSK intends to demerge the joint venture from the company within three years and to list the GSK Consumer Healthcare business on the UK equity market.

“The completion of the joint venture with Pfizer marks the beginning of the next phase of our transformation of GSK. This is an important moment for the Group, laying the foundation for two great companies, one in pharmaceuticals and vaccines and one in consumer health,” adds Emma Walmsley, CEO, GSK and Chair of the JV.

However, while completion of the transaction with Pfizer has taken place today, there are certain jurisdictions in which the transfer of relevant assets to or by GSK will only take place following receipt of additional market-specific approvals or other matters relevant to those jurisdictions. The arrangements in relation to these jurisdictions are considered immaterial in the context of the transaction, notes GSK. 

Edited by Gaynor Selby