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Pfizer could raise ‘up to $15bn’ from consumer unit sale

Would follow in the footsteps of Novartis, Boehringer and Merck & Co if it does strike a deal

Pfizer

Pfizer has confirmed it is considering the future of its consumer healthcare unit, saying that could involve a sale or spin-out of the business.

The statement also indicated that the pharma giant may also opt to hang on to the unit, which generated sales of around $3.4bn in 2016, although Pfizer’s chief executive Ian Read said that despite a “strong connection” with its core biopharma business “it is also distinct enough…that there is potential for its value to be more fully realised outside the company”.

Analysts have suggested that the company could get as much as $15bn for its consumer health operations, which includes big brands such as painkiller Advil (ibuprofen), multivitamin Centrum and ChapStick lipcare products, and Pfizer has suggested it will make a decision sometime next year.

There is speculation that companies potentially interested in a deal could include GlaxoSmithKline (GSK), Reckitt Benckiser, Procter & Gamble, Johnson & Johnson and Abbott, while Reuters has suggested food giant Nestlé may also be interested as it explores a move towards healthcare.

Pfizer has said it does not plan to make any further statements about the strategic review process until a decision has been reached.

Pfizer has been regularly tweaking its structure in the last few years, with Read overseeing its exit from the animal health and nutrition sectors shortly after taking the helm of the company in 2011.

In 2013 Pfizer announced that it intended to split the business into three parts - one for generics and two for branded medicines - although that was shelved last year in the wake of failed merger attempts with AstraZeneca and Allergan, the takeovers of Hospira and cancer specialist Medivation, and the divestment of Hospira’s infusions unit.

Earlier this year, rumours were circulating that Pfizer might be looking to sell off up to $2bn-worth of mature product assets in order to streamline its operations, and there has been persistent speculation that it is still looking to complete a mega-merger with another big pharma group, with Bristol-Myers Squibb (BMS) often mentioned in dispatches as a candidate.

Pfizer is also not alone in its tinkering, and consumer health assets have been changing hands with some frequency in recent years, with Merck KGaA saying last month it is also considering a sale of its consumer health unit.

Sanofi swapped its animal health unit for Boehringer Ingelheim’s CHC consumer health unit in January, while GSK and Novartis set up a consumer health joint venture as part of their 2015 asset-swap deal, and Bayer bought Merck & Co's consumer unit for $14.2bn in 2014.

Article by
Phil Taylor

11th October 2017

From: Sales

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