Pfizer and the UK-based GlaxoSmithKline (GSK) have agreed to merge their respective consumer healthcare businesses into a new joint venture (JV), which will be majority owned by the latter.
According to Pfizer, the combination of the consumer healthcare businesses had registered global sales of nearly $12.7bn in 2017.
GSK said that the combination will comprise two portfolios of health brands such as its Sensodyne, Panadol and Voltaren and Pfizer’s Advil, Caltrate and Centrum.
To operate across the world under the name GSK Consumer Healthcare, the JV will be owned 68% by GSK and 32% by the US pharma major. Last year, the US firm’s consumer healthcare business earned around $3.5bn while the GSK Consumer Healthcare business made about $9.2bn.
Pfizer chief operating officer and incoming CEO Albert Bourla said: “The combination of these leading businesses with distinct regional and category strengths will be more sustainable and broader in scope than either company individually.
“We believe that this joint venture is a great opportunity to ensure the future success of Pfizer Consumer Healthcare while unlocking meaningful after-tax value for Pfizer shareholders.”
Pfizer expects the JV to be a category leader across the areas of pain relief, respiratory, digestive health, vitamin and mineral supplements, skin health and therapeutic oral health.
Further, the US pharma giant claims the JV will be the largest global consumer healthcare business while being the first or second largest player in key regions such as the US, China, Europe, India and Australasia.
GSK CEO Emma Walmsley said: “Through the combination of GSK and Pfizer’s consumer healthcare businesses we will create substantial further value for shareholders.
“At the same time, incremental cashflows and visibility of the intended separation will help support GSK’s future capital planning and further investment in our pharmaceuticals pipeline.”
Earlier this year, GSK agreed to acquire Novartis’ stake of 36.5% in their consumer healthcare JV for $13bn.
In another deal signed earlier this month, the British pharma company agreed to sell Horlicks and other consumer healthcare nutrition products to Unilever for about £3.1bn.