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GSK plans break-up after £10bn Pfizer deal


GlaxoSmithKline, one of the world’s biggest drugs groups, is to be broken up after the company agreed to spin off its consumer healthcare business in a £10bn joint venture with US rival Pfizer.

GSK, whose consumer brands include Sensodyne and Panadol, will have a controlling stake in the partnership of 68%, with Pfizer owning the remainder.

The FTSE 100 drugmaker said that within three years of closing the deal, it will demerge and float the consumer health business, splitting GSK into two distinct businesses: one focused on consumer, the other on pharmaceuticals and vaccines.

Shares in GSK rose 5% in early trading, to £15.22.

Emma Walmsley, chief executive of GSK, said:“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.”

Pfizer’s consumer business includes Anadin and Chapstick, and the merger with GSK’s division will create a business generating £9.8bn in annual sales.

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The new combined entity will be a leader in pain relief, respiratory, vitamin and mineral supplements, digestive health, skin health and therapeutic oral health. 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 US and China.

Walmsley added: “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 [research and development] approach focused on science related to the immune system, use of genetics and advanced technologies, and a new world-leading consumer healthcare company.”

Walmsley, who was chief executive of GSK consumer healthcare before taking on the top job in April 2017, will chair the new joint venture until it is separated.

GSK said it still plans to pay shareholders a dividend of 80p per share for 2018, and announced plans to pay 80p per share for 2019 as well.



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