A new deal between drug firms GlaxoSmithKline (GSK) and Pfizer will now bring famous painkillers Panadol and Anadin under a single roof. These firms are bringing their consumer healthcare divisions together and merging them under a single name that will have annual sales of $12.7 billion. Brands in this merger include Aquafresh toothpaste and Chapsticklipbalm which is still awaiting approval by shareholders and govt regulators. GSK’s consumer healthcare division had been operating as a joint venture with Swiss pharma group Novartis but nine months ago GSK acquired full control of this group and after announcement of the recent merger its share rose by 7 %.
The firm had paid £ 9.2 billion to increase its stake to 36.5 % to Novartis and its Consumer Healthcare Business reported sales of £ 7.8 billion in 2017. It made this deal to focus its attention on over-the-counter oral healthcare and painkiller products that helped to boost sales by £ 550 million in 2017. GSK CEO Emma Walmsley stated that the combination of both powerful consumer healthcare divisions will create substantial value for shareholders. The goal of this merger is to create two exceptional global firms that have adequate capital structures and are well positioned to deliver higher returns to shareholders along with health benefits to patients and consumers.
The joint venture will be named GSK Consumer Healthcare and will be operational in all nations where GSK and Pfizer have business unites. GSK’s Nigerian subsidiary has been excluded from this deal. After this deal becomes finalized, GSK will have six directors on board and Pfizer will have three while the new firm will be kept separate and will be listed on London Stock Exchange within three years. GSK will have 69 % of controlling stake in the new subsidiary while Pfizer will have the other half. As both firms are facing rising costs of research to develop new products this split will help them strengthen their pharmaceutical business.