GSK plans demerger after unveiling new consumer joint venture with Pfizer

Glaxo Pfizer to merge consumer health care divisions

Panadol and Chapstick firms in mega-merger

GlaxoSmithKline, one of the world's biggest pharmaceutical companies, announced that it will split in two Wednesday as part of a new joint venture with US -based pharmaceutical giant Pfizer.

On top of the merger with Pfizer, GSK plans to invest Dollars 300 Million in consumer genetics company 23andMe.

The merger is set to deliver cost savings.

GSK (GSK), which is headquartered in Britain, will own just over two-thirds of the joint venture, with US-based Pfizer (PFE) holding the rest. The 2017 global sales for the combined business were approximately $12.7 billion. It is a bold move by GSK chief executive Emma Walmsley, who has been in charge since April previous year, and appears to answer the longstanding conundrum that has faced the British company about how to balance its drive to find and develop new drugs with selling toothpaste and paracetamol.

Emma Walmsley, chief executive of Glaxo, said: 'Through the combination of Glaxo and Pfizer's consumer healthcare businesses we will create substantial further value for shareholders.

The new GSK-Pfizer business will be the biggest in the world in "over-the-counter"... It will be a world leader in over-the-counter products, with a market share of 7.3% - ahead of its nearest competitor at 4.1% - and will have number one or two market share positions in key markets, including the United States and China.

Turkey welcomes withdrawal of United States troops in Syria
She said the United States is an "important ally" but declined to say whether Germany considers it a "reliable" one, too. USA support for the group has strained ties between the two North Atlantic Treaty Organisation allies.

That has been viewed with scepticism by some analysts, but investors seemed to be happy with the latest announcement - shares in GSK were up more than 7% in early morning trading today.

The ultimate goal is to create two UK-based, exceptional global firms with appropriate capital structures which would be able to deliver significant benefits to patients and consumers and enhancing returns to stakeholders, Walmsley further added.

It will lead to the creation of a consumer health giant with a market share of 7.3 per cent, well ahead of its nearest rivals Johnson & Johnson, Bayer and Sanofi, all on around 4 per cent.

Divestments targeting around £1bn in net proceeds will cover the costs of the integration. The maker of Viagra and the nerve pain treatment Lyrica said it also will have an Innovative Medicines segment, which focuses on biological science and will bring in most of the company's revenue, and an Established Medicines business that include sales for older drugs like the cholesterol pill Lipitor that have lost patent protection.

Pfizer, which already has a long-standing HIV medicines joint venture with GSK, said the transaction would be slightly accretive in each of the first three years after it closed. The original version of this piece of content can be viewed at

Latest News