After the spin-off, or will it be sold for $54 billion?

CompilationFan Dongdong

As GlaxoSmithKline and Pfizer's two-year long journey to spin off their consumer health joint venture is coming to an end, the future direction of the spin-off has suddenly added many variables
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On October 12, Bloomberg reported that several private equity firms were valuing GlaxoSmithKline’s consumer health department, which may be as high as £40 billion (US$54 billion)
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According to Bloomberg News, some well-known manufacturers in the biopharmaceutical industry may be potential acquisition buyers, including Zentiva owner Advent International, CVC Capital Partners, and KKR&Co

However, the decision to choose to sell all consumer health assets will contradict GlaxoSmithKline’s current development plan
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The company previously stated that it would split the consumer health franchise into an independent UK listed company in mid-2022

At the end of 2018, when GlaxoSmithKline announced a large-scale merger with Pfizer’s consumer health business, GlaxoSmithKline has already indicated that it will withdraw from the consumer health field and focus more on the research and development of innovative drugs and vaccines, as well as the exact form of the spin-off.
The plan was announced in June this year
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But the plan quickly became the target of an attack by the radical investment company Elliott Management

Elliott seemed to have had discussions with potential buyers at the time
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The company has said, "If such an opportunity arises in the next few months, we will urge the GSK board to fairly evaluate the default spin-off and sell-off plan announced in the investor update

As for GlaxoSmithKline, the company’s spokesperson said that the company’s board of directors will “fulfil its fiduciary responsibilities to evaluate any possible alternatives to the consumer healthcare business, so as to bring maximum value to all shareholders
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” Glaxo History Ke said that after the split, the new consumer health company will open a new headquarters at the end of 2024, and the headquarters will be located in Weybridge, UK, to establish a new campus

Since the company’s female CEO Emma Walmsley announced the reforms, GlaxoSmithKline’s performance and stock price have been volatile, and Walmsley’s leadership has also been widely questioned
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Elliott has publicly stated that Walmsley lacks a medical professional background and is not qualified for the position of the helm of a professional pharmaceutical company.

According to Bloomberg News, there are currently no confirmed acquisitions
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Taking into account the market size of GlaxoSmithKline's consumer health, its sales in 2020 reached 10 billion pounds, the huge market value may prevent any investment company from making acquisitions alone

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Reference source:

Spinoff or $54B sale? GlaxoSmithKline's consumer health outfit draws buyout interest: report

Spinoff or $54B sale? GlaxoSmithKline's consumer health outfit draws buyout interest: report