This new deal between the two companies will have them combining both of their consumer healthcare businesses into a single entity. This deal will specifically have Pfizer’s Consumer Healthcare joining GlaxoSmithKline’s similar business.
The deal will have GlaxoSmithKline owning the majority of the new joint venture with Pfizer. Specifically, GSk will have a 68% stake and PFE will have a 32% equity stake in the business. This will give each company a pro rata share of earnings and dividends that the business makes.
GlaxoSmithKline notes that it plans to separate the consumer healthcare businesses into its own company once the deal is complete. It plans to do this through a “demerger of its equity interest to its shareholders.” It is also planning to list the business on the UK equity market.
GlaxoSmithKline and Pfizer report that the new consumer healthcare business will have a global reach. The new company will also have yearly revenue of $12.70 billion, as well as $650 million in synergies.
GlaxoSmithKline and Pfizer still need to complete customary closing conditions before the deal can close. This includes approval from regulators and shareholders. If all goes well, the two companies are expecting the deal to reach completion in the second half of 2019.
GSK stock was up 3% and PFE stock was up slightly as of Wednesday morning.
As of this writing, William White did not hold a position in any of the aforementioned securities.