Pfizer and GSK are merging their consumer health units, leading to $12.7bn in combined sales
Pfizer and GlaxoSmithKline (GSK) have entered into an agreement to create a premier global consumer healthcare company. Pfizer will contribute its consumer healthcare business to GSK's existing consumer healthcare business, where 2017 global sales for the combined business have reached up to $12.7 billion.
The new venture will become a leader in consumer health, providing over the counter (OTC) medicines, from pain relief, respiratory and vitamin and mineral supplements, to digestive, skin and oral health, where it will gain extended reach on a global scale, encompassing the US, Europe, China, India and Australia.
“Ultimately, our goal is to create two exceptional, UK-based global companies, with appropriate capital structures, that are each well positioned to deliver improving returns to shareholders and significant benefits to patients and consumers,” commented Emma Walmsley, Chief Executive Officer at GSK.
Under the terms of the transaction, Pfizer will receive a 32% equity stake in the joint venture, entitling Pfizer to its pro rata share of the joint venture’s earnings and dividends, which will be paid on a quarterly basis. Pfizer will have the right to appoint three out of the nine members of the joint venture’s board. The transaction is expected to deliver $650mn in peak cost synergies and to be slightly accretive for Pfizer in each of the first three years after the close of the transaction, which is anticipated during the second half of 2019.
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As Pfizer will own less than 50% of the joint venture, Pfizer anticipates deconsolidating Pfizer Consumer Healthcare from its financial statements following the closing of the transaction. In addition, given the Consumer Healthcare business records lower margins than Pfizer’s other businesses, the deconsolidation is expected to have a slight positive impact on Pfizer’s operating margins over the next several years.
Following the integration of the combined business, GSK intends to separate the joint venture as an independent company via a demerger of its equity interest to its shareholders and a listing of the Consumer Healthcare business on the UK equity market. GSK will have the sole right to decide whether and when to initiate a separation and listing for a period of five years from closing of the proposed transaction. GSK may also sell all or part of its stake in the joint venture in a contemporaneous IPO.
After the fifth anniversary of the closing of the proposed transaction, both GSK and Pfizer will have the right to decide whether and when to initiate a separation and public listing of the joint venture.
“The combination of these leading businesses with distinct regional and category strengths will be more sustainable and broader in scope than either company individually,” said Albert Bourla, Chief Operating Officer and incoming Chief Executive Officer, Pfizer. “We believe that this joint venture is a great opportunity to ensure the future success of Pfizer Consumer Healthcare while unlocking meaningful after-tax value for Pfizer shareholders.”
Check Point: Securing the future of enterprise IT
Cybersecurity solutions provider Check Point was founded in 1993 with a mission to secure ‘everything,’ and that includes the cloud. Conscious that nothing remains static in the digital world, the company prides itself on an ability to integrate new technology with its solutions. Across almost three decades in operation, Check Point, with its team of over 3,500 experts, has become adept at protecting networks, endpoints, mobile, IoT, and cloud.
“The pandemic has been somewhat of an accelerator in the evolution of cyber risk,” explains Erez Yarkoni, Global VP for Cloud Business. “We had remote workers and cloud adoption a long time beforehand, but now the volume and surface area is far greater.” Formerly a CIO for several big-name telcos before joining Check Point in 2019, Yarkoni considers the cloud to be “part of [his] heritage” and one of modern IT’s most valuable tools.
Check Point has three important ‘product families’, Quantum, CloudGuard, and Harmony, with each one providing another layer of holistic IT protection:
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- Harmony: protects remote users and devices from cyber threats that might compromise organisational data
However, more than just providing security, Yarkoni emphasises the need for software to be proactive and minimise the possibility of threats in the first instance. This is something Check Point assuredly delivers, “the industry recognises that preventing, not just detecting, is crucial. Check Point has one platform that gives customers the end-to-end cover they need; they don't have to go anywhere else. That level of threat prevention capability is core to our DNA and across all three product lines.”
In many ways, Check Point’s solutions’ capabilities have actually converged to meet the exact working requirements of contemporary enterprise IT. As more companies embark on their own digital transformation journeys in the wake of COVID-19, the inevitability of unforeseen threats increases, which also makes forming security-based partnerships essential. Healthcare of Ontario Pension Plan (HOOPP) sought out Check Point for this very reason when it was in the process of selecting Microsoft Azure as its cloud provider. “Let's be clear: Azure is a secure cloud, but when you operate in a cloud you need several layers of security and governance to prevent mistakes from becoming risks,” Yarkoni clarifies.
The partnership is a distinctly three-way split, with each bringing its own core expertise and competencies. More than that, Check Point, HOOPP and Microsoft are all invested in deepening their understanding of each other at an engineering and developmental level. “Both of our organisations (Check Point and Microsoft) are customer-obsessed: we look at the problem from the eyes of the customer and ask, ‘Are we creating value?’” That kind of focus is proving to be invaluable in the digital era, when the challenges and threats of tomorrow remain unpredictable. In this climate, only the best protected will survive and Check Point is standing by, ready to help.
“HOOPP is an amazing organisation,” concludes Yarkoni. “For us to be successful with a customer and be selected as a partner is actually a badge of honor. It says, ‘We passed a very intense and in-depth inspection by very smart people,’ and for me that’s the best thing about working with organisations like HOOPP.”