GSK work­ers wait to see if merger could save jobs

The Sligo Champion - - NEWS -

GSK has said it is “far too early” to com­ment on the im­pact on Ir­ish jobs of the merger of its health­care divi­sion with Pfizer’s.

GSK plans to split into two busi­nesses, one for pre­scrip­tion drugs and vac­cines, the other for over-the-counter prod­ucts, af­ter form­ing the joint ven­ture with Pfizer’s con­sumer health divi­sion.

GSK an­nounced in Au­gust that it was to close its Sligo site by 2021, where it man­u­fac­tures skin­care prod­ucts, with the loss of 165 jobs.

It re­mains to be seen if GSK press ahead with the clo­sure in light of the pro­posed merger.

An­nounc­ing the cre­ation of the new con­sumer health­care joint ven­ture be­tween the two com­pa­nies, GSK said the deal is ex­pected to close in the lat­ter half of 2019.

“The sep­a­ra­tion is ex­pected to take place within three years of this so we will have a lot of time to un­der­stand the im­pli­ca­tions, if any, for our sites in Ire­land,” a spokesper­son for GSK said.

“Un­til then, it is very much busi­ness as usual and we will con­tinue to keep our em­ploy­ees in­formed over the com­ing months and years as things progress.”

GSK man­u­fac­tures 90pc of the world’s Panadol at its Dun­gar­van fa­cil­ity, where it em­ploys around 750 staff.

GSK and Pfizer will com­bine their con­sumer health busi­nesses, with sales of £9.8bn (€10.85bn) and 68%-owned by the Bri­tish com­pany, in an all-eq­uity trans­ac­tion.

GSK em­ploys around 1,700 peo­ple in Dun­gar­van, Cork, Dublin and Sligo. GSK also pro­duces Voltorol, Sen­so­dyne and Cor­sodyl in its con­sumer health divi­sion.

GSK’s Cork staff will be un­af­fected by the deal, as it forms part of the firm’s phar­ma­ceu­ti­cal divi­sion.

A spokes­woman for GSK said: “Sub­ject to ap­provals, we would ex­pect to close the deal in the sec­ond half of 2019.

“The sep­a­ra­tion is ex­pected to take place within three years of this so we will have a lot of time to un­der­stand the im­pli­ca­tions, if any, for our sites in Ire­land.

“Un­til then, it is very much busi­ness as usual and we will con­tinue to keep our em­ploy­ees in­formed over the com­ing months and years as things progress.”

Pfizer also said the im­pact lo­cally could not be gauged un­til the deal went through.

A spokes­woman said: “It’s too early to com­ment on whether there will be any lo­cal im­pact as the clos­ing of this trans­ac­tion be­tween Pfizer and GSK is sub­ject to cus­tom­ary clos­ing con­di­tions, in­clud­ing re­quired an­titrust [com­pe­ti­tion] ap­provals and re­ceipt of cost share­holder ap­proval.”

For Pfizer, the deal re­solves the is­sue of what to do with its con­sumer health divi­sion, which in­cludes af­ter an abortive at­tempt to sell it out­right ear­lier this year.

The firm is one of Ire­land’s largest pri­vate em­ploy­ers, with a work­force of more than 3,200 in six lo­ca­tions, in­clud­ing 600 in Rin­gask­iddy in Cork, from where it ex­ports bulk phar­ma­ceu­ti­cals, the ac­tive in­gre­di­ents in its med­i­ca­tions for hu­mans and animals.

How­ever, no con­sumer prod­ucts, which in­clude Advil painkillers and Cen­trum vi­ta­mins, are man­u­fac­tured at its Ir­ish plants.

Shares in GSK rose more than 3.75%, while Pfizer shares rose 0.75% when the deal was an­nounced.

Di­vest­ments tar­get­ing around £1bn in net pro­ceeds will cover the costs of the in­te­gra­tion.

Up to 25pc of the cost sav­ings are in­tended to be rein­vested in the busi­ness to sup­port in­no­va­tion and other growth op­por­tu­ni­ties.

The joint ven­ture will tar­get an ad­justed op­er­at­ing mar­gin per­cent­age in the ‘mid-to-high 20s’ by 2022.

“Through the com­bi­na­tion of GSK and Pfizer’s con­sumer health­care busi­nesses we will cre­ate sub­stan­tial fur­ther value for share­hold­ers,” said GSK Group CEO Emma Walm­s­ley.

“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.”

GSK Group de­liv­ered sales of £8.1bn in its third quar­ter this year.

The group re­ported op­er­at­ing profit of £1.9bn over the three months.

The GSK plant at Finisklin, Sligo which is due to close by 2021.

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