GSK and Pfizer to merge consumer healthcare brands

GSK would have more than two-thirds of equity in new company.

Pharmaceutical giants GlaxoSmithKline and Pfizer are combining their consumer healthcare businesses in a global merger. 

The move would bring brands such as Panadol, Anadin, Aquafresh and ChapStick under one roof with the creation of a new company with annual sales of $12.7bn (£9.8bn).

UK-based GSK would have 68% of the new business, while US company Pfizer would have a 32% stake.

GSK said the spin-off would be a "compelling opportunity" to build on the recent buyout of Novartis’ stake in its consumer healthcare business, as well as bolstering its research and development pipeline.

The joint venture is expected to save £500m in costs by 2022, with 25% of savings intended to be reinvested in the business. 

Just two months ago, GSK awarded its $1.7bn media account to Publicis Groupe and moved the global Panadol business to a bespoke WPP team, which includes Hill & Knowlton Strategies.

In 2016, GSK added Edelman and Weber Shandwick to its roster of agencies.

Pfizer, meanwhile, has used BBDO and VMLY&R for its advertising in recent years and appointed Havas Media as its media agency of record for consumer healthcare in 2015.

Emma Walmsley, GSK’s chief executive, said: "With our future intention to separate, the transaction also presents a clear pathway forward for GSK to create a new global pharmaceuticals/vaccines company, with an R&D approach focused on science related to the immune system, use of genetics and advanced technologies, and a new world-leading consumer healthcare company.

"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."

A version of this article first appeared on PRWeek sister title Campaign

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