Healthcare giants Pfizer Inc and GlaxoSmithKline announced today a joint venture to create a “premier global consumer healthcare company with robust iconic brands.” The agreement was universally ratified on Wednesday by both the board of directors of both companies. Under the new agreement, Pfizer will contribute its current consumer healthcare business to GlaxoSmithKline’s, resulting of an equity split of 32% Pfizer and 68% GlaxoSmithKline.
In 2017, Pfizer recorded revenues of approximately $3.5 billion and GlaxoSmithKline recorded revenues of approximately $9.2 billion. Combined revenues for both companies totalled US$12.7bn. The joint venture is expected to deliver peak cost synergies totalling $650mn.
“We are pleased to announce this new joint venture for Pfizer Consumer Healthcare, delivering on our commitment to complete the strategic review for this business in 2018,” said Ian Read, Pfizer chairman and outgoing CEO. “Pfizer and GSK have an excellent track record of creating successful collaborations, and we look forward to working together again to unlock the potential of our combined consumer healthcare businesses.”
Albert Bourla, Pfizer’s current COO will take over the role of CEO from Read upon the completion of the venture. Bourla said in a statement: “The combination of these leading businesses with distinct regional and category strengths will be more sustainable and broader in scope than either company individually.”
The deal is expected to be completed in the second half of 2019.