GSK consumer health sell-off ahead of Pfizer joint venture

GlaxoSmithKline (GSK) has begun the sale of some of its consumer health brands, hoping to raise around £1 billion before spinning off its consumer healthcare business with Pfizer, according to reports.

Citing sources close to the company Reuters said the big UK pharma has placed non-core drugs into three different portfolios.

Boutique investment bank Greenhill is to market the products to separate bidders, three anonymous sources told Reuters.

CEO Emma Walmsley has her feet under the table after taking the job in April 2017, and is reshaping the business to simplify it and keep shareholders onside with improved efficiency and new revenues.

[caption id="attachment_35945" align="alignnone" width="160"] GSK's Emma Walmsley[/caption]

As part of this GSK is preparing to fold its consumer business into a joint venture with Pfizer in the second half of this year.

The joint venture will be larger than rivals from Johnson & Johnson, Bayer, and Sanofi, and within three years the plan is to demerge and separately float it.

If successful GSK will split into two businesses – one focused on consumer, and the other focused on pharmaceuticals and vaccines.

In preparation for this Reuters added that GSK has offered unspecified concessions to address EU antitrust concerns over the planned joint venture.

The EU competition regulator will decide by July 10 whether to accept the proposal, ask for more concessions, or open a full-scale investigation.

GSK and Pfizer announced the joint venture plans late last year, and at that time GSK said it aimed to divest assets worth around £1 billion throughout 2019 and 2020.

A Reuters source said the three portfolios have combined revenues of £200 million to £300 million, with the European portfolio representing around 40% of the combined sales.

Private equity funds are likely to bid for the assets – such as Advent following its acquisition of the generics firm Zentiva last year.

Other potential bidders include CVC Capital Partners, backer of Italy’s Recordati, along with a consortium of Bain Capital and Cinven, controller of Germany’s Stada and owner of UK consumer products maker Thornton & Ross.

Stada already announced earlier this month it would buy a small portfolio of six UK-focused brands from GSK.

GSK has not commented on the reports.