GSK and Pfizer to combine consumer health units in £10bn venture

Emma Walmsley the chief executive of GlaxoSmithKline

Emma Walmsley the chief executive of GlaxoSmithKline

The joint venture will be 68%-owned by the British company.

She has previously played down the idea of breaking up the group, something that a number of investors have called for over the years.

The two firms are combining their consumer healthcare businesses into one firm with annual sales of £9.8bn.

Pfizer - best known for Viagra and Anadin painkillers - would own the rest, though GSK added that the all-equity deal "lays the foundation" for it to spin off the healthcare arm - as shareholders had demanded of the company.

"It's something we've been able to do quickly and quietly", she told reporters in a conference call.

New York-based Pfizer Inc. had already said it was separating its Consumer Healthcare business from two other segments as part of a reorganization announced last July.

The decision surprised shareholders in both corporations, and GlaxoSmithKline shares jumped as much as 7 percent in London Wednesday, reported the WSJ.

Some planned divestments of $1.3 billion would be expected to cover the costs of the integration.

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

The deal is expected to close in the second half of 2019, Glaxo said in a statement.

Walmsley, who was chief executive of GSK consumer healthcare before taking on the top job in April 2017, will chair the new joint venture until it is separated.

In a separate statement, Pfizer said the joint venture "will be a category leader in pain relief, respiratory, vitamin and mineral supplements, digestive health, skin health and therapeutic oral health and will be the largest global consumer healthcare business".

Shares in GSK rose 6 percent on the news.

GSK has lagged rivals in recent years in producing multibillion-dollar blockbusters and it largely sat out a spate of dealmaking by rivals under previous CEO Andrew Witty.

The tie-up was announced nine months after fellow United Kingdom drug firm RB left the race for Pfizer's consumer arm - leaving the door open for GSK.

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