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GSK pulls out of $20 bln race for Pfizer assets

GlaxoSmithKline said on Friday it had withdrawn from the race to buy Pfizer's consumer healthcare business, which the U.S. drugmaker believes could be worth as much as $20 billion.

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GSK pulls out of $20 bln race for Pfizer assets
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GlaxoSmithKline said on Friday it had withdrawn from the race to buy Pfizer's consumer healthcare business, which the U.S. drugmaker believes could be worth as much as $20 billion.

The British company was seen as the front runner to buy the assets after its main rival Reckitt Benckiser quit the race on Thursday.

"While we will continue to review opportunities that may accelerate our strategy, they must meet our criteria for returns and not compromise our priorities for capital allocation," Chief Executive Emma Walmsley said. 

GSK shares jumped 4 percent to 13.23 pounds at 0809 GMT.

A Pfizer representative was not immediately available to comment.

Earlier, British consumer goods group Reckitt Benckiser has pulled out of talks to buy Pfizer’s consumer healthcare business, strengthening rival bidder GlaxoSmithKline’s hand.

Reckitt dropped out on Wednesday as the US drug company was fielding binding offers for the unit. Sources familiar with the matter said British drugmaker GSK was working on an offer.

Reckitt said its proposal had only been for part of the Pfizer business, without giving further details.

One person familiar with the matter said the company had been most interested in the painkiller Advil.

It is possible Pfizer may receive more offers, the sources added, or it could decide against a sale.

Limited demand could ease the pressure on GSK to pay top-dollar or might allow it to coax the Pfizer unit into a joint venture it has with Novartis, instead of an outright sale, some investors said, although this would be complex.

Pfizer has been hoping to fetch as much as $20 billion for its consumer health business, which includes familiar over-the-counter brands such as Advil, Centrum multivitamins and Chapstick lip balm, according to the sources. Shares in Reckitt jumped more than 5 per cent on Thursday on relief it would not be over-leveraging or making a dilutive rights issue to fund a deal, while GSK slipped 1 per cent.

Founded in 1915, Naspers has transformed itself from an apartheid-era newspaper publisher into a $127 billion multinational with private equity-style investments in e-commerce platforms.

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