Health Care

GSK and Pfizer JV creates 'global leader in OTC products'

GSK and Pfizer JV creates 'global leader in OTC products'”

GSK, whose consumer products include Sensodyne toothpaste, Tums and Panadol painkillers, had withdrawn from that earlier Pfizer auction process but Walmsley said the opportunity to strike an all-equity deal cleared the way for the new agreement.

It is meanwhile a final act for Pfizer CEO Ian Read, who leaves his post at the end of the year, handing the reins over to the company's chief operating officer Albert Bourla.

The new joint venture with Pfizer is expected to generate total annual cost savings of 500 million pounds by 2022 for expected total cash costs of 900 million and non-cash charges of 300 million.

"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 will have six directors on the board, while Pfizer will have three.

First Minister of Scotland Nicola Sturgeon (R) talks with GlaxoSmithKline's (GSK) new CEO Emma Walmsley as the First Minister pays a visit to officially open GSK's new production building on October 22, 2018 in Montrose, Scotland.

GlaxoSmithKline (GSK), is to merge its consumer healthcare unit with that of rival Pfizer, to create a new business with nearly £10bn in annual sales.

"Ultimately, our goal is to create two exceptional United Kingdom -based global companies with the right capital structures, both of which are well positioned to deliver improving returns to shareholders and significant benefits to patients and consumers worldwide", she said.

"However, the potential to shift significant amounts of debt onto the cash generative consumer business should take the strain off the balance sheet, and thus buy valuable time for the pipeline to deliver".

George Salmon, equity analyst at Hargreaves Lansdown, said a specialist pharma group might be better able get results in the labs.

GSK will control 68 per cent of the new business, "laying the foundations" for its new health care operation.

"Still though, all deals can be made to look good on paper - the challenge will be delivering smooth execution of those planned savings".

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