Glaxo offloads non-core assets in US and Canada
Pharmaceuticals giant GlaxoSmithKline, which announced back in February its intention to get rid of its Consumer Healthcare OTC brands, has now reached an agreement with Prestige Brands Holdings to sell these non-core US and Canadian brands for £426m cash.
The brands include BC, Goody's, Beano, Ecotrin, Fiber Choice and Tagamet and generated sales of £134m in 2010 and £98m in the first nine months of this year, the group said. The net profit from their disposal (including transaction costs) will be around £240m pre-tax.
Glaxo said that the net cash proceeds from this transaction, £242m, will be returned to shareholders from next year.
"The disposal of our non-core consumer brands is about realising attractive value for shareholders as well as simplifying our ongoing Consumer business and allowing it to focus on its priority brands and markets," said Chief Financial Officer Simon Dingemans.
Meanwhile, the process of divesting the remaining brands continues but the group assured that any net proceeds from these future sales will be returned to shareholders.
Shares are trading 1.76% lower at 1,424.5p, broadly in line with the pharmaceuticals and biotechnology sector.