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GSK and Pfizer Become Joint Venture

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GlaxoSmithKline (GSK) has completed its transaction with Pfizer to combine both consumer health care businesses into one leading joint venture.

According to GSK, the venture brings together two highly complementary portfolios of trusted consumer health brands, including GSK’s Sensodyne, Voltaren and Panadol brands, and Pfizer’s Advil, Centrum and Caltrate brands. Underpinned by science-based innovation, the  two hold number one or two marketshare positions in all key geographies, including the U.S. and China.

The join venture will focus on completing the integration of the two businesses, which is expected to realize annual cost savings of £0.5 bn by 2022 for expected total cash costs of £0.9 billion and non-cash charges of £0.3 billion. Up to 25% of the cost savings are intended to be reinvested in the business to support innovation and other growth opportunities.

Brian McNamara, chief executive officer of GSK Consumer Healthcare, said, “Now the deal has closed, our focus will be on completing the integration of these two businesses and leveraging their combined strength. With our portfolio of brilliant, science-based brands and strong talent and capabilities, we are well-positioned to create a world-leading consumer healthcare business with stronger sales, cash flow and contribution to earnings.”

As previously announced, GSK intends to demerge the joint venture from the company within three years and to list the GSK Consumer Healthcare business on the UK equity market.

Emma Walmsley, chief executive officer, GSK and chair of the venture, said, “The completion of the joint venture with Pfizer marks the beginning of the next phase of our transformation of GSK. This is an important moment for the group, laying the foundation for two great companies, one in pharmaceuticals and vaccines, and one in consumer health.”