GlaxoSmithKline has agreed a deal to purchase Novartis' 36.5 percent stake in the companies' consumer healthcare joint venture.
The GBP 9.2 billion deal will give GlaxoSmithKline full ownership of the business, which is expected to deliver significant sales and earnings growth in the coming years, having seen sales rise by four percent on a three-year compound annual growth rate basis since 2015.
“GlaxoSmithKline has agreed a GBP 9.2 billion deal to acquire full ownership of Novartis' consumer healthcare business.“
Revenues for the division have reached GBP 7.8 billion, with GlaxoSmithKline set to benefit fully from any future value generated through the business. Purchasing the unit outright also removes uncertainty from the group's capital planning caused by the joint ownership model.
GlaxoSmithKline will now initiate a strategic review of the Horlicks brand and other consumer healthcare nutrition products to fund the transaction, and to support an increased focus on the key over-the-counter and oral health categories.
Emma Walmsley, chief executive officer of GlaxoSmithKline, said: "The proposed transaction addresses one of our key capital allocation priorities and will allow GlaxoSmithKline shareholders to capture the full value of one of the world's leading consumer healthcare businesses."
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