British drugs giant GlaxoSmithKline has completed the tie-up of its consumer healthcare business with Pfizer.
The joint venture – of which GSK will have 68% equity and Pfizer the remaining 32% – is expected to generate cost savings of £500 million by 2022, with a quarter of this sum intended to be reinvested in the business.
The new business will have combined sales of £9.8 billion and the move paves the way for a break-up of Glaxo into two separate UK-based companies – one focused on pharmaceuticals and vaccines and the other on consumer healthcare.
The joint venture will bring together Glaxo’s brands such as Sensodyne, Aquafresh and Panadol with Pfizer’s Advil and Centrum.
Brian McNamara, chief executive, 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.”
Emma Walmsley, chief executive of GSK and chairwoman of the joint 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.”