GSK completes transaction with Pfizer to form new world-leading Consumer Healthcare Joint Venture

GlaxoSmithKline plc (LSE/NYSE: GSK) 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.”

China is the one of the biggest OTC market in the world.  After integration, GSK Consumer Healthcare China will strengthen its leadership positions in Pain Relief, Respiratory, Vitamins, Minerals and Supplements, and Therapeutic Oral Health. The integration will bring together a number of brilliant brands that are deeply loved by Chinese consumers including GSK’s  Fenbid, Sensodyne, Voltaren, Bactroban, Flixonase, Polident, Contac, Lamisil and Pfizer’s Centrum, Caltrate, Treerly, Robitussin, IMEDEEN and Emergen-C, meeting people’s demands from daily health management to disease treatment. The new Consumer Healthcare will further support the roll-out and implementation of the “Healthy China 2030” blueprint by helping more Chinese consumers better manage their health.

After the JV formation, Ms. Susan Gu, previously Cluster General Manager, Pfizer Consumer Healthcare will take the position of General Manager of Greater China Area, GSK Consumer Healthcare.