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    • Reckitt Benckiser...

    Reckitt Benckiser pulls out of Pfizer consumer health auction

    Written by Ruby Khatun Khatun Published On 2018-03-23T10:00:14+05:30  |  Updated On 17 Aug 2021 10:56 AM IST

    British consumer goods maker Reckitt Benckiser Group said it had ended discussions with Pfizer Inc over buying its consumer healthcare business, a day before the U.S. drug company was expecting binding offers for the unit.


    Reckitt's exit from the sale process strengthens the hand of British pharmaceutical company GlaxoSmithKline Plc, which sources familiar with the matter said was working on an offer for the business. It is possible that Pfizer will receive more offers by Thursday's deadline for bids, the sources added.



    "An acquisition for the whole Pfizer consumer health business did not fit our acquisition criteria and an acquisition of part of the business was not possible," Reckitt said.

    Reckitt's priority would remain organic growth and integration of Mead Johnson Nutrition, the British company said in a statement.


    "Pfizer continues to evaluate potential strategic alternatives for the consumer healthcare business, which include a spin-off, sale or other transaction, and Pfizer ultimately retaining the business. We have not yet made a decision, but continue to expect to make one in 2018," Pfizer said in a statement.


    A deal would be the boldest move to date for GlaxoSmithKline CEO Emma Walmsley, took over last April. It would further increase the company's already substantial position in consumer health, an increasingly lucrative sector as aging populations and health-conscious consumers drive demand for self-medication.


    Pfizer has been hoping to fetch as much as $20 billion (£14.1 billion) for its consumer health business, which includes well-known over-the-counter brands such as the Advil painkiller, Centrum multivitamins, and Chapstick lip balm, according to the sources.


    Although consumer remedies sold over the counter have lower margins than prescription drugs, they are typically very well known and durable brands with loyal customers.


    GlaxoSmithKline has struggled with a scarcity of promising new drugs in its pipeline at a time of mounting competition in its core respiratory and HIV divisions.


    Adding Pfizer's consumer healthcare business would likely boost GlaxoSmithKline's earnings, given the economies of scale the enlarged business would enjoy, but would also stretch GlaxoSmithKline's finances, analysts have said.



    GlaxoSmithKline runs its consumer healthcare business via a joint venture with Novartis AG. Novartis has the right to sell down its minority stake starting from this month, although it has previously indicated it is in no rush to do so.

    "You would expect us to take a serious look at any leading and very appealing assets in the sector because we are a world leader in consumer healthcare and have a very good track record of integrating businesses successfully," GlaxoSmithKline's Walmsley said last month.


    "We will be extremely focused on discipline around returns and frankly, this is not a need to do."





    (Reporting by Greg Roumeliotis and Carl O'Donnell in New York; additional reporting by Martinne Geller and Hirschler in London and Manas Mishra and Rama Venkat Raman in Bengaluru; editing by Tom Brownand Richard Chang)




    AcquisitionAdvil painkillerauctionCentrum multivitaminsconsumer healthEmma WalmsleyGlaxoSmithKlinePfizerReckitt Benckiser
    Source : REUTERS

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    Ruby Khatun Khatun
    Ruby Khatun Khatun
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