Pfizer, GSK merging their consumer health care businesses

New company would have combined sales of $12.7B

By DANIEL SHANE, CNN BUSINESS
Spencer Platt/Getty Images

(CNN) - GlaxoSmithKline and Pfizer are combining their consumer healthcare businesses in a multibillion-dollar merger.

The two pharmaceutical giants — which own household names like Advil and Tums — said Wednesday that the new company would have combined sales of $12.7 billion a year.

The merger will bring together Pfizer's big sellers like Centrum and Caltrate with GSK's top brands, including Excedrin and Nicorette.

GSK (GSK), which is headquartered in Britain, will own just over two-thirds of the joint venture, with US-based Pfizer (PFE) holding the rest.

After the tie-up, GSK said it plans to split in two by spinning off the new consumer healthcare business and listing it in London within three years. GSK's remaining operations will be focused on making prescription medicines and vaccines.

"Our goal is to create two exceptional, UK-based global companies," GSK CEO Emma Walmsley said in a statement.

GSK shares jumped more than 7% in London following the announcement.

Pfizer has been looking to offload its consumer healthcare business, saying last year that it might either sell the business outright or spin it off as a separately traded stock. Pfizer makes most of its billions from its core prescription drugs unit, which has produced the cholesterol medication Lyrica and erectile dysfunction pill Viagra.

This is GSK's second major deal in a matter of weeks. It recently sold most of its India nutrition business, a portfolio that includes popular health drink brands Horlicks and Boost, to Unilever (UL) in a deal worth nearly $4 billion.

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