GlaxoSmithKline provides further update on divestment of non-core OTC brands

GlaxoSmithKlineIn February 2011, GSK announced its intention to divest non-core Consumer Healthcare over-the-counter (OTC) products predominantly in the United States and Europe with aggregate sales of approximately £500 million. The proposed divestment is designed to realise value for shareholders and simplify GSK's Consumer Healthcare business by enabling it to focus on priority brands and markets.

Brands in Europe
GSK today announced that it has reached agreement to divest the previously identified non-core OTC brands in Europe to Omega Pharma for €470 million (£391 million) in cash.

The brands being divested include Lactacyd, Abtei, Solpadeine, Zantac, Nytol and Beconase and generated sales of approximately £185 million in 2011. It is expected the divestment will complete in Q2 2012, subject to regulatory approvals.

The net cash proceeds from the transaction are expected to be approximately £310 million. These will be returned to shareholders during 2012.

The net profit on disposal of the assets (including all transaction costs) is estimated to be approximately £230 million (pre-tax), £190 million (post-tax). The pre-tax profit will be recorded in Other Operating Income following completion of the disposal and will be excluded from core operating profit and EPS.

As part of the agreement, Omega will be acquiring the Herrenberg manufacturing site which is located in Germany and employs approximately 110 people. A number of the brands that are being divested are manufactured at Herrenberg and it is anticipated that existing employees will transfer with the site to Omega Pharma under the provisions of German employment law.

GSK's Chief Financial Officer, Simon Dingemans said: "The divestment of our non-core brands in Europe builds on the recent successful sale of our US and Canadian assets. Given the continued economic challenges across the Eurozone, I am pleased that we have been able to transact these assets at a good price for GSK. The objective of this divestment process is to generate attractive returns for shareholders as well as simplifying our ongoing Consumer business and enabling it to focus on its priority brands and markets."

Brands in USA and Canada
In December 2011, GSK announced that it had reached agreement with Prestige Brands Holdings, Inc, to divest brands in the USA and Canada for £426 million ($660 million) and net cash proceeds of approximately £242 million. The vast majority of the transaction was completed at the end of January 2012 and the net proceeds will be returned to shareholders via a supplemental dividend of 5p to be paid with the fourth quarter 2011 ordinary dividend.

Brands in international markets and global rights for alli
GSK remains in active discussions regarding the divestment of the remaining brands in markets outside of Europe and North America. The OTC brands in these markets generated sales of approximately £60 million in 2011.

The company continues to plan to divest alli. However, pending the resolution of a temporary third party supply interruption, the process to divest alli has been delayed.

Omega Pharma is an OTC healthcare company headquartered in Nazareth (Belgium) with operations in 35 countries across Europe and selected emerging markets. Its products are sold across an extensive network of pharmacies and related retail outlets.

GlaxoSmithKline - one of the world's leading research-based pharmaceutical and healthcare companies - is committed to improving the quality of human life by enabling people to do more, feel better and live longer.

Most Popular Now

Time-restricted eating reshapes gene expression th…

Numerous studies have shown health benefits of time-restricted eating including increase in life span in laboratory studies, making practices like intermittent fasting a ...

Incurable liver disease may prove curable

Research led by Associate Professor Duc Dong, Ph.D., has shown for the first time that the effects of Alagille syndrome, an incurable genetic disorder that affects the li...

Scientists develop a cancer vaccine to simultaneou…

Scientists are harnessing a new way to turn cancer cells into potent, anti-cancer agents. In the latest work from the lab of Khalid Shah, MS, PhD, at Brigham and Women’s ...

AstraZeneca to acquire CinCor Pharma to strengthen…

AstraZeneca has entered into a definitive agreement to acquire CinCor Pharma, Inc. (CinCor), a US-based clinical-stage biopharmaceutical company, focused on developing no...

NextPoint Therapeutics announces $80 million Serie…

NextPoint Therapeutics, a biotechnology company developing a new world of precision immuno-oncology, announced today that it raised $80 million in Series B financing co-l...

COVID-19 vaccines, prior infection reduce transmis…

Vaccination and boosting, especially when recent, helped to limit the spread of COVID-19 in California prisons during the first Omicron wave, according to an analysis by ...

Bayer to accelerate drug discovery with Google Clo…

Bayer AG and Google Cloud announced a collaboration to drive early drug discovery that will apply Google Cloud's Tensor Processing Units (TPUs), which are custom-develope...

Study identifies potential new approach for treati…

Targeting iron metabolism in immune system cells may offer a new approach for treating systemic lupus erythematosus (SLE) - the most common form of the chronic autoimmune...

Nanotechnology may improve gene therapy for blindn…

Using nanotechnology that enabled mRNA-based COVID-19 vaccines, a new approach to gene therapy may improve how physicians treat inherited forms of blindness. A collabo...

Acquisition of Neogene Therapeutics completed

AstraZeneca has completed the acquisition of Neogene Therapeutics Inc. (Neogene), a global clinical-stage biotechnology company pioneering the discovery, development and ...

Modified CRISPR-based enzymes improve the prospect…

Many genetic diseases are caused by diverse mutations spread across an entire gene, and designing genome editing approaches for each patient’s mutation would be impractic...

Pfizer expands 'An Accord for a Healthier World' p…

Pfizer Inc. (NYSE: PFE) announced that it has significantly expanded its commitment to An Accord for a Healthier World to offer the full portfolio of medicines and vaccin...