Pharmaceutical companies GlaxoSmithKline (GSK) and Pfizer announced that they have reached an agreement to combine their consumer health businesses.
The joint venture will have an estimated sales total of $12.7 billion (€11.1 million) and GSK will hold a 68% majority share over Pfizer’s 32%.
According to a GSK press release, the joint venture will be set to deliver stronger sales, cash flow and earnings growth which will be driven by science-based innovation and substantial cost synergies.
“The transaction we have announced today is a unique opportunity to accelerate this work. Through the combination of GSK and Pfizer’s consumer healthcare businesses we will create substantial further value for shareholders,” said Emma Walmsley, GSK CEO.
“At the same time, incremental cashflows and visibility of the intended separation will help support GSK’s future capital planning and further investment in our pharmaceuticals pipeline.
“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.”
Pfizer claims that the joint venture will be a ‘category leader’ in a variety of healthcare industries as well as being the ‘largest’ global consumer healthcare business.
The venture will operate globally under the GSK Consumer Healthcare name.
“The combination of these leading businesses with distinct regional and category strengths will be more sustainable and broader in scope than either company individually,” said Pfizer COO Albert Bourla.
“We believe that this joint venture is a great opportunity to ensure the future success of Pfizer Consumer Healthcare while unlocking meaningful after-tax value for Pfizer shareholders.”