GSK pulls out of $20b race for Pfizer consumer assets
LONDON: GlaxoSmithKline (GSK) has withdrawn from the race to buy Pfizer’s consumer healthcare business, the British company said on Friday, endangering an auction the US drugmaker hoped would bring in as much as $20 billion.
It was not immediately clear whether there were other offers for the business, which includes Advil painkillers and Centrum vitamins, following this week’s deadline for binding bids.
GSK was seen as the frontrunner to buy the assets, after Reckitt Benckiser quit the race late on Wednesday.
“While we will continue to review opportunities that may accelerate our strategy, they must meet our criteria for returns and not compromise our priorities for capital allocation,” GSK Chief Executive Emma Walmsley said in a statement.
Sources familiar with the matter said on Thursday there might still be interest in the Pfizer business, or the US firm could decide against a sale.
Pfizer said on Friday it continued to evaluate potential alternatives for the business, which include a spin-off, sale or other transaction, as well as retaining it. “We have not yet made a decision, but continue to expect to make one in 2018,” a spokesman said. Pfizer is the world’s fifthlargest player in consumer health with 2.5 per cent of a market bolstered by aging populations and growing interest in health and wellness.
The business, which also includes Chapstick lip balm and Caltrate supplements, came to market at a bad time for both GSK and Reckitt.
Pfizer’s hope of proceeds of around $20 billion, or about 20 times the unit’s core earnings according to Bernstein analysts, contrasted with both companies’ need for financial discipline.
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