Pfizer Consumer Combo Deal Frees Capital For GSK Pharma Investment

Separating out its consumer business in a joint venture with Pfizer will open up investment possibilities for GlaxoSmithKline's pharma and vaccine businesses.

Pharma investment will be freed from the bind of consumer business debt

The planned all-equity arrangement to combine the consumer health businesses of GlaxoSmithKline PLC and Pfizer Inc. will create greater visibility around the capital structure for GSK's pharma and vaccines business and ultimately, by de-levering – or reducing the debt ratio of – that business, free up resources to invest in its R&D pipeline. So said GSK's management on an investor call to outline the details of the transaction, which will see the GSK and Pfizer consumer businesses coming together in a joint venture with combined sales of £9.8bn.

The new consumer company will become the leading OTC business globally. (Also see "GSK And Pfizer Start Consumer JV...