Pfizer Closes Joint Venture with GlaxoSmithKline

pfizerPfizer Inc. (NYSE: PFE) closed its joint venture with GlaxoSmithKline plc (NYSE: GSK) to combine the parties’ respective consumer healthcare businesses to create the world’s largest over-the-counter (OTC) business.

As previously announced, under the terms of the transaction, Pfizer owns a 32% equity stake in the joint venture and GSK owns 68%.

The combined business, which will operate globally as GSK Consumer Healthcare, will be led by CEO Brian McNamara.

The combined brand portfolio will have leadership positions in pain relief, respiratory and vitamins, minerals and supplements, and therapeutic oral health. In addition, operating together, the two business will hold the number one OTC position in the U.S. and the number two OTC position in China – the two biggest OTC markets in the world.

As part of the agreement, three out of the nine members of the joint venture’s board have been appointed by Pfizer and include:
– John Young, Group President, Chief Business Officer;
– Douglas Giordano, Senior Vice President, Worldwide Business Development, and
– Bryan Supran, Senior Vice President, Deputy General Counsel.

The transaction is expected to deliver $650 million in peak cost synergies and to be slightly accretive on a full-year basis for Pfizer in each of the first three years following the closing.

GSK intends to separate the joint venture as an independent company via a demerger of its equity interest to its shareholders and a listing of the joint venture on the UK equity market. GSK will have the sole right to decide whether and when to initiate a separation and listing for a period of five years following the closing and may also sell all or part of its stake in the joint venture in a contemporaneous IPO.
Should a separation and listing occur during the first five years after closing, Pfizer has the option to participate through the distribution of its equity interest in the joint venture to its shareholders or the sale of its equity interest in a contemporaneous IPO.
After the fifth anniversary of the closing, both GSK and Pfizer will have the right to decide whether and when to initiate a separation and public listing of the joint venture.



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