GlaxoSmithKline (GSK) has sold the rights to several 'non-core' over-the-counter (OTC) products in the US and Canada to Prestige Brands Holdings for £426m.
The US-based company, which markets, sells and distributes OTC and household cleaning products to retail outlets, acquires the rights to the brands such as GSK's aspirin Ecotrin, pain reliever BC and heartburn treatment Tagamet.
GSK had originally intended to agree a single global deal for all the OTC products, including its weight loss treatment Alli, with US private equity firm Thomas H Lee Partners (THL) seen as the lead candidate.
So it still needs a European buyer for the products, and global rights to Alli remain on the table. Negotiations for these product licences, which GSK said brought in revenues of around £400m during 2010, remain ongoing.
Simon Dingemans, GSK's chief financial officer, said: "The disposal of our non-core consumer brands is about realising attractive value for shareholders as well as simplifying our ongoing consumer business and allowing it to focus on its priority brands and markets.”
The products acquired by Prestige Brands Holdings brought in £134m during 2010 and £98m in the first nine months of 2011.
GSK originally announced its intention to sell off the OTC products in April, 2011, claiming the lines lacked 'sufficient critical mass'.
It defined the three priorities of its consumer healthcare business as oral health, wellness/OTC and Nutrition, citing such products as Sensodyne and Panodol as its priority brands.
Andrew Witty, CEO of GSK, described its consumer business as a “key growth driver” but said the company had to focus on products with the “best prospects” for growth.
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