International Finance

GSK-Pfizer merger gets South Africa regulator’s conditional approval

The merger GlaxoSmithKline -Pfizer will create a health care giant with sales of £9.8 billion

The planned GlaxoSmithKline (GSK) -Pfizer merger has received the South African regulatory body’s approval with conditions, Reuters reported.

According to South Africa’s Competition Commission, the merger will not reduce competition in the market, but it will impact local manufacturers of pharmaceuticals for Pfizer.

The commission therefore suggested that for the next three years, the concerned parties use the services of Spechpharm Holdings, a local firm providing manufacturing and packaging services.

Last year, pharmaceutical giant GlaxoSmithKline announced its plan to merge its consumer healthcare business with that of Pfizer’s.

The new entity, of which GlaxoSmithKline would own 68 percent, will become the world’s biggest supplier of over-the-counter medicines with brands such as Advil, and Panadol, under its banner and sales worth £9.8 billion.

The remaining 32 percent stake would be owned by Pfizer.

GlaxoSmithKline’s plan is to create two UK-listed global companies. One will focus on the development of drugs while the other will focus on consumer healthcare.

However, within three years of the closing of the transaction, GlaxoSmithKline plans to separate the joint venture through a demerger of its equity interest. Then, the company will list GlaxoSmithKline Consumer Healthcare on the UK equity market.

Earlier, GlaxoSmithKline kicked off the sale of some consumer health brands as it seeks to raise about £1 billion. The drugmaker hired Greenhill, a boutique investment firm for the sale and created three different portfolios to be sold to different bidders.

Private equity funds including Advent and CVC Capital Partners are some of the bidders for these portfolios.

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