GlaxoSmithKline, one of the world's biggest drugs groups, is to be broken up after the company agreed to spin off its consumer healthcare business in a £10bn joint venture with U.S. rival Pfizer.
The joint venture will be a leader in pain relief, respiratory, vitamin and mineral supplements, digestive health, skin health and will be the first or second largest consumer healthcare player in key geographies.
If approved, the JV is expected to generate total annual cost savings of £5m (€6.3bn) by 2022 for expected total cash costs of £9m and non-cash charges of £3bn.
According to GSK, the JV "lays [the] foundation...to create two new UK-based global companies": one focused on pharmaceuticals and vaccines, and the other, consumer healthcare. Glaxo aims to do this within three years.More news: Celtic face Valencia test as Chelsea and Arsenal land favourable Europa ties
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GSK said it still plans to pay shareholders a dividend of 80p per share for 2018, and announced plans to pay 80p per share for 2019 as well.
"Ultimately, our goal is to create two exceptional United Kingdom -based global companies with the right capital structures, both of which are well positioned to deliver improving returns to shareholders and significant benefits to patients and consumers worldwide", she said.
"Pfizer and GSK have an excellent track record of creating successful collaborations, and we look forward to working together again to unlock the potential of our combined consumer healthcare businesses", he added.
According to GSK, the JV "will be the global leader in over-the-counter (OTC) products with a market share of 7.3% ahead of its nearest competitor at 4.1%".
"The separation will take away the steady cash flows of the consumer business, meaning there's more pressure on the men and women in white coats to deliver the next generation of blockbusters", he said.