Worlds two
Pharmaceuticals giants- UK based Glaxo SmithKline and US based Pfizer of announced merger of their healthcare businesses to
creating the world’s biggest supplier of OTC (Over-the-counter) medicines.
These include famous brands like Anadin, Panadol and Voltarol. This
announcement made on 19th December 2018
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| Image courtesy- Wikipedia |
Chief executive of Glaxo- Emma Walmsley told that ‘share holders were pressed the company to split since years, believing there are greater benefits to having two companies, each focused on one area, than in a diversified group.’
Emma
Walmsley said “the transaction also presents a clear pathway forward for GSK to
create new global pharmaceuticals / vaccines company… focused on science
related to the immune system, use of genetics and advanced technologies”
“Ultimately,
our goal is to create two exceptional, UK based global companies, with
appropriate capital structures, that are each well positioned to deliver
improving returns to shareholders and significant benefits to patients and
consumers,” she added.
The new
entity would have a joint market share that is far exceeded their rivals such
as Bayer, Johnson & Johnson and Sanofi. The new entity if targeting annual savings of £500m ($633milllion) by 2022. GSK’s merger with Pfizer.
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| image courtesy - Wikipedia |
The merger
is going to be Mr. Ian Read’s last big venture as a CEO of Pfizer, since he
will be succeeded by the company’s chief operating officer Albert Bourla by the
end of this year.
“ 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” He continued to say “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”, said Ian Read.
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| image courtesy Pixabay |
George
Salmon, an equity analyst at Hargreaves Lansdown said that GSK’s decision to
split had come as a surprise.
“The separation
will take away the steady cash flows of the consumer business, meaning there’s
more pressure on the men and women in white coats to deliver the next
generation of blockbusters.”
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| Image courtesy - Pixabay |
GSK and Pfizer
both are struggling to cope up against the increasing cost of new drugs research
as other healthcare companies demanding lesser priced medicines. The GSK & Pfizer merger news pleases shareholders and in-turn GSK's share price surged to 7% on 19th December.
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