Pfizer is planning an auction process for its consumer healthcare business this November. With Pfizer reporting sales amounts over $3.4 billion in 2016, this has the potential to be a $15 billion-plus sale.
Many companies are showing interest increased interest in the division of the company. Preliminary discussions with interested parties including Reckitt Benckiser and GSK Chief Executive Emma Walmsley confirmed that she would look “carefully” at the business. Other possible bidders may include Procter & Gamble, Sanofi, Johnson & Johnson and Nestle.
Pfizer intends sending out the financial information about the unit to its prospective buyers shortly. The process is expected to begin in early 2018 leaving the possibility of a deal to be finalized by mid-year.
Germany’s Merck KGaA, the maker of Seven Seas vitamins, is also considering selling its consumer health business and hired JP Morgan for the sale. Industry sources believe that Merck may put things on hold since the sale, valued around $4.5 billion, risks being surpassed by the Pfizer auction.
Medications sold over the counter typically have lower margins than prescription drugs, but they are long-lasting brands with faithful customers. Some of Pfizer’s recognized well- brands include painkiller Advil, Centrum multivitamins and lip balm Chapstick. Pfizer Chief Executive Ian Read stated the sale of consumer healthcare unit was not essential to the main prescription drug business and could possibly be worth more outside the group.
For Reckitt, over-the-counter medicines propose higher-margin growth than its current household business. Chief Executive Rakesh Kapoor stated that he would consider a bid if Pfizer’s strategic review lead to a sale.
THE MORNING REPORT
Start your workday the right way with the news that matters most.
Nestle may also join the bidding war and use the Pfizer consumer business as a platform to expand the connection of food and healthcare. The Swiss group has previously shown interest in consumer healthcare sector.