Slew of Potential Suitors for GSK Consumer Health Business

 

Shares of GlaxoSmithKline were climbing in premarket trading on rumors that the company’s consumer health business it intends to spin off into a separate company next year is attracting interest from venture capitalists.

First reported by Bloomberg, GSK’s advisors are reportedly receiving calls from potential buyers of the consumer health business unit that is valued at approximately $54 billion. Among the potential suitors are Advent International, CVC Capital Partners and KKR & Co. Additionally, Blackstone, Inc., Carlyle Group and Permira are also seen as potential buyers.

GSK’s consumer health care business is a joint venture with Pfizer. The consumer health-care business of both companies will be combined to form this new entity. The combined portfolio, includes Advil, Tums, Sensodyne toothpaste, Excedrin and Nicorette gum. In 2020, that combined portfolio generated annual sales of more than £10 billion (about $13.9 billion).

The GSK split is expected to occur in mid-2022. Earlier this summer, GSK’s embattled chief executive officer, Emma Walmsley, outlined the projected de-merger of the company, which will see it split into a pharmaceutical business and a consumer health business. The pharma business, currently called New GSK, will have projected revenue of about $46 billion by 2031.

Walsmley has been beset by critics who do not believe she is suited to continue to lead New GSK following the split due to her lack of a scientific background. Activist investor groups Bluebell Capital Partners and Elliott Management have both called for Walmsley’s ouster. Walmsley took over as CEO of GSK in 2017 after running the company’s consumer health business.

News about the interested buyers in GSK comes a day after the company unveiled plans for a new global campus and innovation center for the consumer health business. The site will house the consumer health company following the split. The consumer business will be located in the community of Weybridge in England. The new campus will include an innovation center made up of R&D laboratories and the Consumer Healthcare Shopper Science lab. It will also contain the company’s global support function teams based in the UK. It will be home to around 1,400 employees.

Brian McNamara, who is set to helm the consumer business following the de-merger, expressed his excitement about the campus. He said the space will bring together GSK Consumer Healthcare’s “first-in-class teams as we drive towards our ambitions as the world’s leading consumer healthcare company.” He added that the campus announcement is an important step for the entity ahead of the separation.