Glax­oSmithK­line in health di­vi­sion merger

Yorkshire Post - Business - - FRONT PAGE - Grace Ham­mond BUSI­NESS RE­PORTER @york­shire­post

Drugs gi­ant Glax­oSmithK­line has agreed a tie-up with US ri­val Pfizer to merge their con­sumer health­care di­vi­sions to cre­ate a busi­ness with com­bined sales of £9.8bn.

The deal paves the way for Glaxo to break it­self up to form two sep­a­rate UK-based com­pa­nies – one fo­cused on phar­ma­ceu­ti­cals and vac­cines, and the other on con­sumer health­care.

Glaxo said it is aim­ing to do this within three years of com­plet­ing the con­sumer health­care joint ven­ture.

It comes after pres­sure from share­hold­ers for Glaxo to spin off its con­sumer di­vi­sion.

Glaxo will own 68 per cent of the con­sumer health­care joint ven­ture, while US firm Pfizer will own the re­main­ing 32 per cent stake. The merger is set to de­liver cost sav­ings of £500m by 2022, of which up to 25 per cent will be rein­vested in the busi­ness.

It will bring to­gether Glaxo’s brands such as Sen­so­dyne, Voltaren and Panadol and Pfizer’s Advil and Cen­trum.

Emma Walm­s­ley, in­set, chief ex­ec­u­tive of Glaxo, said: “Through the com­bi­na­tion of GSK and Pfizer’s con­sumer health­care busi­nesses we will cre­ate sub­stan­tial fur­ther value for share­hold­ers.”

“With our fu­ture in­ten­tion to sep­a­rate, the trans­ac­tion also presents a clear path­way for­ward for GSK to cre­ate a new global phar­ma­ceu­ti­cals/ vac­cines com­pany, with a re­search and de­vel­op­ment ap­proach fo­cused on sci­ence re­lated to the im­mune sys­tem, use of ge­net­ics and ad­vanced tech­nolo­gies, and a new world-lead­ing con­sumer health­care com­pany.”

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