GlaxoSmithKline has divested another bunch of non-core over-the-counter brands, this time to Aspen Pharmacare Holdings, a company the UK drugs giant has a major stake in.
The South African drugmaker is paying £164 million in cash to get hold of 19 brands sold in international markets. The OTC products, which include the analgesic Solpadeine and stomach drug Zantac, generated sales of £59.3 million in 2011.
Proceeds from the transaction are expected to be £135 million and GSK noted these are expected to be returned to shareholders during 2012. The Aspen deal follows agreements reached in December 2011 and last month to divest the brands in the USA and Canada (to Prestige Brands Holdings) and in Europe (to Omega Pharma), respectively.
Divestiture of Alli delayed
GSK, which has just had a $2.60 billion takeover bid rejected for Human Genome Sciences, said that the total net cash proceeds from all these divestments are £690 million and it continues to plan to sell the OTC weight loss drug Alli (orlistat). However, "pending the resolution of a temporary third-party supply interruption [at a Roche facility in the USA], the process to divest Alli has been delayed".
As for Aspen, chief executive Stephen Saad said the products acquired "have considerable established brand equity", which the firm "intends to leverage through increased promotion and plans to expand through line extensions". The will also provide "impetus in territories where Aspen is seeking to grow critical mass such as Latin America and South East Asia”, he added.