GlaxoSmithKline and Pfizer to form new Consumer Healthcare Joint Venture in Merger

GlaxoSmithKline (GSK) has announced plans to split its prescription and vaccination operations and it’s over-the-counter operations into two separate businesses after announcing a merge venture with global rivals Pfizer.
Today GSK CEO, Emma Walmsley announced that GSK and Pfizer would combine their consumer health businesses in a joint venture with sales of €10.8 billion, 68 per cent-owned by the British company, in an all-equity transaction and 32 per cent owned by Pfizer.

Emma Walmsley, Chief Executive Officer, GSK, said: “Ultimately, our goal is to create two exceptional, UK-based global companies, with appropriate capital structures, that are each well positioned to deliver improving returns to shareholders and significant benefits to patients and consumers.”

The deal for Pfizer provides a solution for the future of  its consumer health department, which includes Advil painkillers and Centrum vitamins, after making an attempt to sell it earlier in the year.

This new merger with Pfizer is expected to generate total annual cost savings of €554 million by 2022 for expected total cash costs of €998 million and non-cash charges of €333 million. GSK plans divestments of some €1+ billion.

The proposed transaction is subject to approval by GSK shareholders and conditional upon the receipt of certain anti-trust authority approvals. Subject to these approvals, the transaction is expected to close in the second half of 2019. The Board intends to recommend that GSK shareholders vote in favour of the proposed transaction.

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