GlaxoSmithKline reaches agreement to divest non-core OTC brands for £164 million
Posted: 23 April 2012 | | No comments yet
Announcement follows divestment of brands in USA, Canada & Europe…
GlaxoSmithKline Plc (GSK) today announced that it has reached agreement to divest the previously identified non-core OTC brands in its international markets to Aspen Pharmacare Holdings Limited (Aspen) for £164 million in cash.
The brands being divested include Phillips MOM, Solpadeine, Dequadin, Cartia and Zantac, and generated sales of approximately £60 million in 2011. It is expected the divestment will complete in Q2 2012, subject to regulatory approvals.
The net cash proceeds from the transaction are expected to be approximately £135 million. These are expected to be returned to shareholders during 2012.
Net profit on this disposal in 2012 (after deducting transaction costs and a profit deferral of approximately £25 million pre-tax arising because Aspen is an associate of GSK) is estimated to be approximately £105 million (pre-tax), £90 million (post-tax).
In February 2011, GSK announced its intention to divest its non-core Consumer Healthcare OTC products to realise value for shareholders and simplify the business by enabling it to focus on priority brands and markets. Agreements were reached in December 2011 and in March 2012 to divest the brands in the USA & Canada and in Europe respectively.
Total sales for the brands now agreed to be divested in the United States, Canada, Europe and international markets were approximately £370 million in 2011. The total gross cash proceeds from the divestment of these products are £981 million and the net cash proceeds are approximately £690 million.
The company continues to plan to divest alli. However, as previously stated, pending the resolution of a temporary third party supply interruption, the process to divest alli has been delayed.
GlaxoSmithKline – one of the world’s leading research-based pharmaceutical and healthcare companies – is committed to improving the quality of human life by enabling people to do more, feel better and live longer. For further information please visit www.gsk.com.
