GSK says on course to demerge consumer arm after report of buyout interest

FILE PHOTO: A GlaxoSmithKline plant is seen in Montrose, Scotland, Britain October 22, 2018. Andy Buchanan/Pool via REUTERS

(Reuters) – UK drugmaker GlaxoSmithKline said its plan to separate its consumer healthcare unit next year were on track, after Bloomberg reported potential buyout interest in the business from private equity firms such as Advent, CVC and KKR.

The unit, a venture with Pfizer, could also attract some of the world’s biggest pharmaceutical and consumer goods companies, the Bloomberg report, citing sources, said here on Tuesday, adding the business could be valued at 40 billion pounds ($54 billion) or more.

A GSK spokesman declined to comment on whether the company had received takeover interest in the consumer healthcare business.

“GSK is far advanced with its plan for the separation of Consumer Healthcare. This has been developed according to a clear set of guiding principles,” he said, adding the company was firmly on track for the split in mid-2022.

The London-listed company in June set out plans to turn the consumer arm into a separately listed company to boost its underperforming drugs business, and has also vehemently defended those plans after activist investor Elliott made some proposals here.

“The GSK board will fulfil its fiduciary duties to evaluate any alternative options for Consumer Healthcare which may arise that maximise value for all shareholders,” the GSK representative said.

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