Pfizer revealed in February that it was considering the sale of its consumer healthcare operations. Although the unit generated sales of almost $4 billion last year, Pfizer stated that it was conducting a strategic review of the business amidst growing pressures to cut costs and simultaneously increase investment in the research and development of new innovative ethical medicines.
Pfizer had also suggested the possibility of spinning off the business to shareholders. However, the significant tax bill that would be incurred from such a move added to the value of potential takeover bids is likely to lead to an outright sale. Analysts had originally expected Pfizer’s consumer business, which includes top-selling brands like Listerine mouthwash and Sudafed decongestant, to fetch around $14 billion.
GlaxoSmithKline may well see additional value in the business having already built up a considerable consumer health division of its own. Acquiring the Pfizer unit would bring few product overlaps or antitrust issues and GSK could also gain benefit from its existing US infrastructure.
GSK is now expected to compete for the unit alongside fellow industry heavyweights Johnson & Johnson and Colgate-Palmolive.