Pfizer consumer-health unit runs out of buyers
Company left without a potential buyer as GlaxoSmithKline withdrew from bidding
Pfizer Inc’s Advil and Centrum aren’t as desirable as the US drug giant expected.
The company was left without a potential buyer for its consumer-health unit yesterday as UK drugmaker GlaxoSmithKline Plc withdrew from bidding, after Reckitt Benckiser Group Plc dropped out earlier last week.
The development left the US Glaxo Chief Executive Officer Emma Walmsley has been shaking up the drugmaker, focusing on developing promising new drugs. Glaxo’s investors balked last year when she mentioned interest in the Pfizer unit, fearing that it might endanger Glaxo’s dividend.
“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,” Glaxo said in a statement yesterday. The shares surged as much as 5.9 per cent in London, their biggest intraday gain in four years. company with dwindling options to dispose of a business valued at as much as $20 billion (Dh73.4 billion).
Glaxo, Bayer AG, Sanofi and other makers of over-thecounter health products have experienced pressure on prices as drugstores and online retailers vie to get shoppers. Merck is exploring options for its consumer division and has yet to find a buyer. The sector’s environment is changing as stores push their own brands and consumers become more budget-conscious, said Michael Leuchten, a London-based analyst with UBS Group AG.
“The world has changed, and Glaxo has said that, Bayer has said that, Sanofi has said that to some extent,” Leuchten said in a telephone interview. “That means these businesses or assets probably won’t be able to fetch the multiples they have in the past.”
Pfizer said in an emailed statement that it’s evaluating potential strategic alternatives for the business, which include a spin-off, a sale or other transaction, or retaining the business.