Glaxo SmithKline and Pfizer announced Wednesday that they will merge their consumer healthcare businesses to create the world’s largest seller of over-the-counter medicines.
According to terms of the deal, GSK will own 68 percent of the business and Pfizer will own 32 percent. Combined, the two companies had $12.7 billion in consumer healthcare sales last year.
The deal is expected to be finalized sometime in the second quarter, and terms call for the new joint venture to be spun off into a separate company within three years after that.
The two companies own some of the most well-known over-the-counter brands, including Advil, Chapstick, Centrum, Excedrin, Flonase, Sensodyne and Theraflu.
The venture will operate under the GSK Consumer Healthcare name worldwide, and the companies said packaging likely will be altered to add the GSK Consumer Healthcare name where needed.
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Spokespeople for both companies on Wednesday said they couldn't comment yet or had no information on changes consumers might see in the combined product lineup, whether product prices might be changed and whether the new business would be developing additional consumer items.
GSK said the combination is expected to result in cost savings of more than $600 million a year by 2022, and some of that is likely to come in the form of job cuts.
“Obviously there's going to be some impact on people,†GSK CEO Emma Walmsley said during a conference call to discuss the deal.
“That's something we are working through and we will certainly be talking to our employees before we start talking about that in any way publicly,†she said.
GSK has a consumer healthcare manufacturing plant just east of Lincoln at 10401 U.S. 6 that it inherited from Novartis after the two companies entered a joint venture in 2015. GSK bought out Novartis’ share of the venture earlier this year. The plant once employed more than 800 people but now has about 500.
Pfizer had a manufacturing plant in Lincoln that was part of its animal health division, which it spun off into a separate company called Zoetis in 2013.
Pfizer, which is based in New York, had announced earlier this year that it wanted to divest its consumer healthcare business.
Reach the writer at 402-473-2647 or molberding@journalstar.com.
On Twitter @LincolnBizBuzz.
The Associated Press contributed to this story.