GlaxoSmithkine, Reckitt Benckiser bid for Pfizer
GlaxoSmithKline and Reckitt Benckiser Group are the only companies to have submitted nonbinding bids for Pfizer’s consumer-health business after other potential suitors bowed out, according to people with knowledge of the matter.
Pfizer planned to open a data room for Glaxo and Reckitt to start due diligence on the assets before submitting final offers in the next few weeks, the people said, asking not to be identified because the matter is private.
French drug maker Sanofi, Switzerland’s Nestle and US healthcare giant Johnson & Johnson were among companies to consider and then decide against bidding for the business, the people said.
The deadline for nonbinding offers for the business — which includes popular brands such as the pain reliever Advil, ChapStick lip balm and the dietary supplement Centrum — was February. 1, the people said.
The unit could fetch $15bn to $20bn, they said.
Potential buyers had expressed concerns about the division’s stagnant sales as well as the challenge from online competitors such as Amazon.com. Representatives for Glaxo, Reckitt, Sanofi and Nestle declined to comment.
A spokesman for Johnson & Johnson confirmed it had withdrawn from the bidding process and declined further comment.
Glaxo share price fell 1.3% to £12.93 by 8:55am in London, extending its rout in the past year to 15.3%. Reckitt declined 1.6% to £66.07.
Pfizer was continuing to evaluate a range of options for its consumer healthcare business, including a full or partial separation through a spin-off, sale or other transaction, and it might still opt to keep the business, a spokeswoman said.
The New York-based drug maker expected to reach a decision in 2018, she said. Its stock closed down 0.6% at $36.61 on Friday.
Pfizer first announced a review of the business in October 2017. A sale would help it raise billions of dollars for acquisitions and streamline operations to focus on other growth areas. Sales at the consumerproducts business were little changed in the fourth quarter from a year earlier at $950m.
Full-year sales at the unit advanced 2% to $3.47 bn.
Glaxo CEO Emma Walmsley said in January the company’s top priority was the pharmaceuticals business and that it did not need the Pfizer assets, though the business would be complementary to its own.
Facing pressure to rejuvenate her company’s medicine pipeline and make the division more competitive, Walmsley has replaced about 50 of 125 top managers, aiming to bring in new ideas and skills.
Reckitt CEO Rakesh Kapoor in 2017 split the England-based company into autonomous divisions for home-care and health products, taking the helm of the latter unit himself.
That move triggered speculation that he was laying the groundwork for a broader strategic shift, or even a sale of the household business. The CEO has faced increasing pressure to rejuvenate the businesses following a slump in sales at the newly acquired baby-formula business Mead Johnson.
THE CEO HAS FACED INCREASING PRESSURE TO REJUVENATE THE BUSINESSES FOLLOWING A SLUMP