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GSK divests OTC brands for 426 million
 
 
  pharmatimes World News | December 21, 2011

GlaxoSmithKline is to divest a number of non-core over-the-counter brands in the USA, Canada and Europe to Prestige Brands Holdings for 426 million.

The intention to make this move had been announced back in February 2011 and was proposed in order to realise value for shareholders and simplify GSK's consumer healthcare business and allow it to focus on its priority brands and markets.

The brands being divested include BC, Goody's, Beano, Ecotrin, Fiber Choice and Tagamet and generated sales of approximately 134 million in 2010 and 98 million in the first none months of 2011. It is expected the divestment will complete in H1 2012, subject to regulatory approvals.

The net cash proceeds from the transaction are expected to be approximately 242 million and these will be returned to shareholders during 2012.

The UK drug giant is also in the process of divesting other brands outside the USA and Canada, including OTC weight loss drug Alli (orlistat), and discussions with potential buyers continue.

GSK's chief financial officer, Simon Dingemans 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. I am pleased that we have achieved such a good result for our US and Canadian assets, especially in such difficult market conditions.

A portfolio of nearly 20 brands has been identified by the company for divestment, which has an estimated value worth up to $3.1 billion and according to 2010 sales figures these products generated about 500 million, making up 10% of GSK's total consumer healthcare business turnover.

The priority brand areas that GSK will now focus on include oral health, wellness/OTC and nutrition.

 
 
 
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