GlaxoSmithKline looks likely to acquire Pfizer’s consumer healthcare arm

Reckitt Benckiser (RB) have announced their decision to end talks to acquire Pfizer’s consumer healthcare business. Pfizer’s decision to not split its division has seen it have just one sole interested company interested in acquiring the whole unit – GlaxoSmithKline (GSK).

Nestle and Johnson & Johnson have also pulled out of a potential acquisition.

Pfizer is seeking up to $20bn for its consumer division, which houses brands such as Chapstick, Advil and Centrum under its umbrella.

Upon the announcement of its decision to take the company out of the running, Chief Executive Rakesh Kapoor explained: “An acquisition for the whole Pfizer consumer health business did not fit our acquisition criteria and an acquisition of part of the business was not possible.”

Shares at RB rose upon the news announcement by 5.5%.

A takeover by GSK will see the company gain further foothold within the consumer healthcare market globally and boost efficiencies across its operations, providing further revenue.

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Upon RB’s decision, Pfizer released a statement, explaining its position.

“Pfizer continues to evaluate potential strategic alternatives for the consumer healthcare business, which include a spin-off, sale or other transaction, and Pfizer ultimately retaining the business. We have not yet made a decision, but continue to expect to make one in 2018.”

GSK’s Chief Executive Officer Emma Walmsley has previously revealed that a potential acquisition is something the company is looking into. Its consumer healthcare business is presently a joint venture with Novartis AG, who hold a minority stake.

“You would expect us to take a serious look at any leading and very appealing assets in the sector because we are a world leader in consumer healthcare and have a very good track record of integrating businesses successfully,” she said.

However, she added: “We will be extremely focused on discipline around returns and frankly, this is not a need to do.”

Nonetheless, with rampant competition from both traditional companies and those who are entering the industry from the technology sector, GSK could receive a better deal than expected if no other company places a bid.