GSK withdraws from running for Pfizer Consumer Health
pharmafile | March 23, 2018 | News story | Medical Communications, Sales and Marketing | GSK, Pfizer, Pfizer Consumer Health, biotech, drugs, pharma, pharmaceutical
GSK has announced that it has decided to pull out of the race to acquire Pfizer’s Consumer Health business, ending months of speculation.
After fellow UK business Reckitt Benckiser dropped out of discussions with the US pharma giant, GSK had been the favourite to pick up the business but now, unless there was an unannounced eleventh hour bid, it looks like Pfizer will have to reassess its options.
GSK’s Emma Walmsley, CEO of the business, commented on the decision to withdraw from bidding by releasing a statement reading: “While we will continue to review opportunities that may accelerate our strategy, they must meet our criteria for returns and not compromise our priorities for capital allocation”.
Reckitt Benckiser had previously pulled out, after it is believed to have been looking to take on only a part of the consumer health business rather than take on the whole business. It is believed that its interest mainly focused on acquiring painkiller, Advil, but Pfizer wasn’t prepared to part with only a portion of the business.
RB Chief Executive, Rakesh Kapoor, said that it had approached the potential takeover “in a rigorous, disciplined, and financially responsible manner”, before adding: “An acquisition for the whole Pfizer consumer health business did not fit our acquisition criteria.”
It had looked like GSK was in a strong position to negotiate the best price for the company and, according to Bloomberg referencing people close to the matter, it is believed that GSK had tabled an offer. However, clearly the deal didn’t meet the company’s criteria.
The decision to acquire the unit would not have been an easy one for Walmsley to make, as she has previously stated that her commitment is to strengthening the company’s pharma division. A move to persuade Pfizer to part with the business would have likely involved a figure from $15 billion to $20 billion, significantly reducing the amount of flexibility for vamping up GSK’s R&D efforts.
Answering questions previously at the JP Morgan Healthcare Conference, Walmsley had commented on the possibility of making the acquisition: “At this stage it would be weird if we didn’t look at it”, but also added, “we don’t need it and we won’t overpay for it.”
It looks like the latter sentiment prevailed.
Ben Hargreaves
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