GSK, Novartis create an $11 billion consumer healthcare business
LONDON — Following a multifaceted deal with Novartis on Tuesday, GlaxoSmithKline and Novartis have created a consumer healthcare giant with annual worldwide revenues of $11 billion on a 2013 pro forma basis. The new business, to be called GSK Consumer Healthcare, will hold category leading positions and brands in wellness, oral health, nutrition and skin health, the company reported.
“The Novartis OTC portfolio is highly complementary to GSK’s and has many well-known, widely recommended brands, such as Voltaren, Excedrin, Otrivin and Theraflu," stated Sir Andrew Witty, GSK CEO. "Together, we will create the world’s premier OTC business with clear opportunities to accelerate revenue growth."
Emma Walmsley, currently GSK's consumer head, has been appointed as CEO designate of the new business and will be a member of its board. Witty will be chairman of the board. The board will comprise directors from both GSK and Novartis.
GSK will have majority control of the joint venture with an equity interest of 63.5%
In wellness, the new combination’s $5.7 billion complementary portfolio will create one of the world’s largest OTC businesses with a leading position in more than 35 countries. According to GSK, Novartis’ portfolio has had relatively limited exposure to high growth emerging markets and this presents multiple new growth opportunities for several major brands and innovations, notably Voltaren, Excedrin and Otrivin.
Similarly, GSK’s brands would benefit from exposure to Novartis’ highly successful European businesses.
According to a Wall Street Journal breakdown of the deal, "some of the new company's biggest products will be in pain and cold relief: the North American brand Excedrin and the European brands Panadol, Beecham's and Voltaren gel, for migraines, headaches, colds and joint pain. Antismoking aids NicoDerm, NiQuitin and Nicotinell, in gums, lozenges and patches, will also be key products." The Novartis business will also bring such products as cough suppressant Sinecod, nasal decongestant Otrivin and fiber supplement Benefiber.
The second-largest area for the combined business will be oral care, according to the WSJ report, including Sensodyne and Aquafresh toothpastes and Poligrip denture adhesive.