GSK announces ‘strategic review’ of consumer nutrition portfolio to help fund €13bn Novartis deal
Just days after the UK-based consumer health giant announced it was leaving the $20 billion race for Pfizer’s OTC business, GSK has agreed to buy out Novartis’ 36.5% stake in their joint-venture consumer health unit for a reported $13bn (€10.5bn).
GSK and Novartis formed the consumer health group in 2014 as part of an asset exchange that combined their over-the-counter (OTC) drugs and nutritional supplements into one joint venture and saw Novartis acquire GSK’s portfolio of cancer drugs.
The new deal will see GSK gain full control of the OTC venture containing brands including Theraflu cold medicine, Panadol pain relievers and the Tums antacid brand.
“The proposed transaction addresses one of our key capital allocation priorities and will allow GSK shareholders to capture the full value of one of the world’s leading consumer healthcare businesses,” said GSK chief executive, Emma Walmsley.
To help support the funding of the deal GSK has now said it will begin a strategic review of its consumer nutrition products – including malted beverage brand Horlicks – as the company looks to focus more on over-the-counter and oral health categories.
Announcing the review, GSK added that the majority of Horlicks sales come from India, where the drinks range is seen as a healthy and premium nutrition product.
“GSK expects the outcome of the strategic review to be concluded around the end of 2018. There can be no assurance that the review process will result in any transaction,” the company added.
