GlaxoSmithKline (GSK) has announced the completion of its transaction with Pfizer to combine their consumer healthcare businesses into a world-leading joint venture.
Under the terms GSK has a controlling equity interest of 68% and Pfizer has an equity interest of 32% in the venture, which brings together the two highly complementary portfolios of consumer health brands, including GSK’s Sensodyne, Voltaren and Panadol and Pfizer’s Advil, Centrum and Caltrate.
Following the announcement, the joint venture will focus on completing the integration of the two businesses, which is expected to realise annual cost savings of £0.5 billion by 2022 for expected total cash costs of £0.9 billion and non-cash charges of £0.3 billion. The companies also stated that 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 at GSK Consumer Healthcare, said that 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 de-merge the venture from the company within three years and to list the GSK Consumer Healthcare business on the UK equity market.