GSK may sell Horlicks to focus on OTC and oral health

GSK may sell Horlicks to focus on OTC and oral health

Pharmaceuticals giant GSK is to take full control of a joint venture which owns Sensodyne toothpaste, Panadol headache tablets and Nicotinell patches.

GSK will pay Novartis £9.2bn for its 36.5% stake in the Consumer Healthcare Business which was formed in 2015.

To fund the acquisition GSK is considering selling its Horlicks brand and other nutrition products.

Last week GSK dropped its bid for Pfizer’s consumer healthcare unit.

The Consumer Healthcare Business reported sales of £7.8 billion in 2017.

In its statement GSK said it was “initiating a strategic review” of Horlicks and its other consumer healthcare nutrition products to help pay for the acquisition of the joint venture.

It would also enable it to focus more on over the counter medicines and oral health which between them notched up sales of £550m in 2017.

Last year GSK confirmed plans to sell its Horlicks business in the UK and close the site where the malted drink was made. It also said it would off-load its MaxiNutrition brand.

The biggest sales of Horlicks and GSK’s other nutrition products are in India, where Horlicks is seen as a “premium nutrition” product.

The company said it expected the strategic review to be completed by the end of this year. “There can be no assurance that the review process will result in any transaction,” it added.

GSK chief executive Emma Walmsley said: “The proposed transaction addresses one of our key capital allocation priorities and will allow GSK shareholders to capture the full value of one of the world’s leading consumer healthcare businesses.”

Novartis said the sale would allow it to focus on the development and growth of its core businesses.

Novartis chief executive Vas Narasimhan said the consumer healthcare joint venture was doing well, but the time was right for the company to sell a non-core asset at an “attractive” price.

“This will strengthen our ability to allocate capital to grow our core businesses, drive shareholder returns, and execute value creating bolt-on acquisitions as we continue to build the leading medicines company, powered by digital and data,” he added.

Shares in GSK were up by nearly 3% following the announcement, while Novartis rose by 1.6%.

Source: BBC News

Leave a Reply