GSK and Pfizer in £24bn deal
Job fears as pharma giants merge healthcare
A £24BILLION deal to merge the makers of cold remedy Beechams and painkiller Anadin has triggered job-loss fears.
British drugs giant GlaxoSmithKline and US rival Pfizer have announced plans to combine their consumer healthcare arms.
The mega tie-up will bring together GSK’s host of brands, including Aquafresh and Sensodyne toothpaste, with Pfizer’s, such as Chapstick lip balm and Centrum multivitamins.
It will create £500million a year in cost savings.
Emma Walmsley, chief executive of Glaxo, admitted: “Obviously there’s going to be some impact on people.
“That’s something we are working through and we will certainly be talking to our employees before we start talking about that in any way publicly.”
GSK’s consumer healthcare arm employs 1,700 people in the UK, including 350 in Weybridge, Surrey, at the firm’s HQ in Brentford, West London, Maidenhead in Berks, and Barnard Castle, Co Durham. Pfizer’s consumer arm employs just 60 people in the UK.
The merger means the combined business will have joint assets of £23.9bn and sales of £9.8bn, and after the deal Glaxo will focus on its vaccines and pharmaceuticals.
Glaxo’s share price jumped nearly 4% on the back of the news.
Under terms of the all-share deal, Glaxo will own 68% of the consumer healthcare joint venture, while US partner Pfizer will own the remaining 32% stake.
On Brexit contingency planning, Walmsley added: “What we’re focused on in terms of Brexit, whatever the scenario might be, is ensuring the supply of vaccines and products that people need. We have been working on that for some time with the Government and we’re confident we can be ready in all scenarios for that.”
The deal comes after Glaxo pulled out of an auction to buy Pfizer’s consumer business earlier this year.
Glaxo and Pfizer said the eventual plan is for the joint business to be floated on the stock market when it is ready to stand alone.