Near the end of last week, a Reuters news story broke indicating that Pfizer would be opening an auction process for its OTC business as early as this November, and that preliminary discussions had already taken place. GSK and RB have been tipped as frontrunners in securing a deal, though P&G, Sanofi, J&J and Nestlé have also been cited as possible bidders.
In Friday’s OTC.Newsflash bulletin, Nicholas Hall stated that there could possibly be 3-4 strategic buyers in the final bidding, and that the eventual selling price of Pfizer’s OTC unit could rise above US$20bn.
During GSK’s Q3 2017 results presentation, CEO Emma Walmsley confirmed that the company is interested in bidding for Pfizer’s OTC division and “building up our Consumer business”. However, there was a note of caution when the GSK CEO stated that “our first focus in capital allocation was clearly around our biggest business in Pharma, and R&D within that”.
Using the latest DB6 figures for the MAT Q2 2017 period, now available on the OTC DASHBOARD website, we have created a graph below showing how the global Top 5 in the OTC industry would be transformed if GSK was to snap us Pfizer’s OTC business (assuming, of course, that there wouldn’t be any divestments):
As you can see, the deal would put GSK far ahead of its rivals, and make it the standout OTC marketer in what it is currently a very tight and competitive Top 4. Likewise, we also analysed the data to see the impact of RB acquiring Pfizer’s OTC unit on the global Top 5 and again the result would likely be a clear new global No.1:
As ever, it’s hard to be sure how the situation will unfold, and it’s possible that Pfizer may even decide to hold on to its OTC business, but whatever happens we’ll be sure to keep you updated with the latest news and analysis here at OTC DASHBOARD.