Categories Earnings, Other Industries

Glaxo buys Novartis’ share of consumer healthcare joint venture

U.K.-based pharma giant GlaxoSmithKline (GSK), which holds about a two-thirds share in the Consumer Healthcare business JV with its partner Novartis (NVS), plans to acquire the rest of the 36.5% stake held by the Swiss-based pharma giant for $13 billion. As a result of this deal, Novartis’ four directors will leave the JV Board, which has 11 members in total.

The JV business, which handles Aquafresh toothpaste and Tums digestion tablets among other products, was formed in 2015, in which, Novartis is entitled to ask Glaxo to purchase its stake at any time effective from 2018 to 2035. Now, Glaxo does not have to be financially prepared for such an event.

GSK, which retreated from the bidding war for the Pfizer consumer healthcare business, will now be able to concentrate on its preferences such as pharma research, which will require capital allocation. The deal will also benefit GSK’s cash flows and non-GAAP profit.

As a result of this deal, Novartis’ four directors will leave the JV Board, which has 11 members in total

In order to finance this deal, GSK is looking at options to sell its Horlicks brand along with its other nutrition products and will soon start a strategic review of this business. This review process might not expect to result in a transaction. Horlicks enjoys strong sales in India and the sale of Glaxo’s stake in its Indian unit could provide some benefits.

This transaction, which needs the approval of GSK shareholders, will also give Novartis opportunities to allocate capital to more priority businesses and also flexibility to focus on other acquisition options. While GSK stock rose 2.5%, Novartis fell slightly when the market closed today.

Whether this deal has stopped Glaxo from taking over the Pfizer consumer healthcare business, which would come at a hefty price of up to $20 billion, or whether it has actually given it the financial flexibility to pursue the same remains to be seen. However, at present, with Novartis, Glaxo appears to have made the right move.

Most Popular

CCL Earnings: Carnival Corp. Q4 2024 revenue rises 10%

Carnival Corporation & plc. (NYSE: CCL) Friday reported strong revenue growth for the fourth quarter of 2024. The cruise line operator reported a profit for Q4, compared to a loss

Key metrics from Nike’s (NKE) Q2 2025 earnings results

NIKE, Inc. (NYSE: NKE) reported total revenues of $12.4 billion for the second quarter of 2025, down 8% on a reported basis and down 9% on a currency-neutral basis. Net

FDX Earnings: FedEx Q2 2025 adjusted profit increases; revenue dips

Cargo giant FedEx Corporation (NYSE: FDX), which completed an organizational restructuring recently, announced financial results for the second quarter of 2025. Second-quarter earnings, excluding one-off items, were $4.05 per share,

Tags

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top