Pfizer and GlaxoSmithKline Form a Joint Venture

On December 19, GlaxoSmithKline (GSK) and Pfizer (PFE) entered into an agreement to combine both of their consumer health businesses to form a joint venture. According to the agreement, GlaxoSmithKline and Pfizer will have an equity interest of ~68% and ~32% in the joint venture, respectively. The transaction creates an opportunity to build a world-leading consumer healthcare business.

Combining GlaxoSmithKline and Pfizer’s consumer businesses will bring together both companies’ segment-leading products. The transaction will bring together segment-leading brands in pain relief, vitamins and mineral supplements, digestive health, skin health, respiratory products, and oral health.

Pfizer’s top consumer health brands include Advil, Centrum, Emergen-C, and Caltrate. GlaxoSmithKline’s top consumer health products include Sensodyne, Voltaren, and Panadol. The joint venture will bring these top global brands to one platform. The joint venture will be a leader in the over-the-counter space.

The joint venture between Pfizer and GlaxoSmithKline in consumer healthcare is expected to generate cost savings of ~0.5 billion British pounds by 2022. The planned divestments in the joint venture will be ~1.0 billion British pounds, which could cover the net proceeds.

Pfizer and GlaxoSmithKline have planned to reinvest 25% of the cost savings towards innovation and other commercial opportunities.

Next, we’ll discuss both companies’ backgrounds in consumer health.