Pfizer plans to quit GSK consumer health joint venture post spinoff

By Vinisha Joshi  | Date: 2022-06-03

Pfizer plans to quit GSK consumer health joint venture post spinoff

Pharma giant Pfizer plans to sell its shares in consumer joint venture with GlaxoSmithKline post the business branched out into a new standalone entity called Haleon.

Reportedly, GSK plans to dedicate nearly 80% of its 68% shares in the joint venture into Haleon, an offshoot which is scheduled to start trading on the London Stock Exchange on July 18.

Currently, Pfizer holds the remaining 32% of the joint venture and has announced its plans to exit the business in a disciplined manner while complying to several conditions.

However, both companies will avoid selling shares for a while and a lock-up period will be continued through November 10 subject to the agreement unless Haleon rolls out certain financial results prior.

Formed in 2019, the JV supplies household products like Centrum vitamins, pain reliever Advil, and Sensodyne toothpaste, with total annual sales of $12.6 billion under its current business form.

While the venture has been fruitful for Pfizer with nearly $600 million via pretax income every year, the pharma company is shifting focus on the development of vaccines and new medicines and will exit the venture in order to maximize the value for shareholders.

Meanwhile, GSK intends to continue with Haleon despite response from major consumer goods players such as the three offers from Unilever – one in late 2021 valuing at $62.4 billion – all of which were rejected by GSK.

As per the company, GSK investors will get one share in Haleon for every share owned in the British drugmaker and post spinoff, GSK stockholders will get at least 54.5% of Haleon with GSK accountable for nearly 6%.

Additionally, the joint venture holding company will also grant dividends to both GSK as well as Pfizer before the dissolution, adding more than $8.78 billion to GSK’s repository.

Eventually, Haleon is expected to emerge as the standalone world leader in consumer health, with annual revenue growth between 4% to 6%, led by Brian McNamara – former head of consumer health business - who is appointed as the CEO of Haleon.

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Vinisha Joshi

Vinisha Joshi

As a qualified Engineering graduate, Vinisha Joshi takes pride in playing with words. Presently, she pens down insightful articles on business, core industry, technology, and the like for Thisisourtownrichmond in addition to other platforms. Creativity comes naturally...

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