GlaxoSmithKline Plc - GSK completes transaction with Pfizer for New JV
GlaxoSmithKline plc today announced that it has completed its transaction with Pfizer to combine their consumer healthcare businesses into a world-leading Joint Venture. GSK has a controlling equity interest of 68% and Pfizer has an equity interest of 32% in the Joint Venture.
The Joint Venture brings together two highly complementary portfolios of trusted consumer health brands, including GSK's Sensodyne, Voltaren and Panadol and Pfizer's Advil, Centrum and Caltrate. Underpinned by science-based innovation, it is the global leader in OTC products and has number 1 or 2 market share positions in all key geographies, including the US and China.
Following today's announcement, the Joint Venture will focus on completing the integration of the two businesses, which is expected to realise annual cost savings of £0.5bn by 2022 for expected total cash costs of £0.9 billion and non-cash charges of £0.3 billion. Up to 25% of the cost savings are intended to be reinvested in the business to support innovation and other growth opportunities.
Brian McNamara, Chief Executive Officer, GSK Consumer Healthcare, said:
"Now the deal has closed, our focus will be on completing the integration of these two businesses and leveraging their combined strength. With our portfolio of brilliant, science-based brands and strong talent and capabilities, we are well-positioned to create a world-leading consumer healthcare business with stronger sales, cash flow and contribution to earnings."
As previously announced, GSK intends to demerge the Joint Venture from the company within three years and to list the GSK Consumer Healthcare business on the UK equity market.
Emma Walmsley, Chief Executive Officer, GSK and Chair of the Joint Venture, said:
"The completion of the joint venture with Pfizer marks the beginning of the next phase of our transformation of GSK. This is an important moment for the Group, laying the foundation for two great companies, one in Pharmaceuticals and Vaccines and one in Consumer Health."
While completion of the transaction with Pfizer has taken place today, there are certain jurisdictions in which the transfer of relevant assets to or by GSK will only take place following receipt of additional market-specific approvals or other matters relevant to those jurisdictions. The arrangements in relation to these jurisdictions are considered immaterial in the context of the transaction.