Tragedy hit Pfizer (PFE) when several big names — GlaxoSmithKline (GSK), Reckitt Benckiser, and Johnson & Johnson (JNJ) — pulled out of the prospective takeover of the Viagra maker’s consumer products business. However, all hope is not lost for Pfizer with Procter & Gamble Co (PG) showing interest to acquire the unit.
Pfizer (PFE) had looked at a wide range of alternatives for its fragmented consumer healthcare unit that turned into a fertile ground for deal-making over the recent years. This division of the drugmaker is seen as one of the largest over-the-counter- healthcare products businesses in the world.
According to reports by CNBC, P&G is willing to offer Pfizer $15 billion for the consumer business that includes products such as Chapstick lip balm, Advil, cough medicine Robitussin, heartburn drug Nexium, Centrum Vitamins, and Preparation H that treats hemorrhoid. However, this proposal by P&G is way below the $20 billion range that what Pfizer expected. In 2016, the consumer healthcare unit had sales of $3.4 billion.
If Pfizer accepts this offer from P&G, then it would be a reunion for the latter with ThermaCare brand that it dumped in 2008. The brand was then purchased by pharma company Wyeth which Pfizer took over a year later in 2009. If P&G and Pfizer deal doesn’t go through, then reports also suggest that the drug maker is evaluating other alternatives that include a shared venture with other drug makers.
But then the path for P&G might not be as smooth as some of its ointments, for we cannot rule out a rival bid for the Pfizer unit from food giant Nestlé. Over the recent years, the KitKat maker has worked aggressively to expand its healthcare unit — Nestle Health Sciences. With Nestlé headed by CEO Ulf Mark Schneider — who is from the healthcare sector, it is safe to assume a counter offer. The food company is currently said to be in talks to acquire Merck’s (MRK) consumer health unit.
No sharp movements in the Pfizer’s stock over the past few quarters have led to investors losing interest. Let’s hope this deal helps Pfizer shake out of the range-bound performance it has exhibited over the past few years.