Pfizer in Talks with Procter & Gamble for Consumer Health Unit, Reports Say
Published: Apr 03, 2018 By Alex Keown
First reported by CNBC, Procter & Gamble is the “one potential bidder” currently in talks with Pfizer for the business unit that has been up for sales for several months. Pfizer has been hoping to garner up to $20 billion for the consumer health business, which includes a number of familiar brands such as Advil, Robitussin, Chapstick lip balm and Preparation H.
While the two companies are in talks, CNBC reported that it appears unlikely an agreement will be struck due to the price tag. CNBC said that information was provided by unnamed sources who are “familiar with the situation.” Procter & Gamble, according to the CNBC sources, is only looking to spend between $15 and $16 billion for the unit. That multi-billion gap appears to be “too large to bridge, at least at the present,” CNBC said.
Pfizer has been attempting to sell the business unit for some time and in recent weeks two potential bidders have walked away from a deal. In March both GlaxoSmithKline and Reckitt Benckiser Group decided against making a bid for the business unit. Reckitt, a British consumer good group, was reportedly only interested in a portion of the Pfizer business unit.
When GSK walked away from Pfizer Chief Executive Officer Emma Walmsley said any deal GSK strikes must meet the company’s criteria for returns and also not compromise its priorities for capital allocation.
Four days after formally bowing out of the deal British pharma giant GSK opted to take full control of its own consumer health unit by buying out its partner Novartis. GSK plunked down $13 billion for Novartis’ 36.5 percent stake in the joint venture business unit that markets products such as Sensodyne toothpaste and Panadol headache tablets.
Pfizer initially indicated that it was interested in a possible sale of its consumer division last year. In 2016 the business unit generated $3.4 billion in revenue. Pfizer has maintained it has several options for the unit, including a spin-off, sale or a decision to retain the business. CNBC also noted that the company believes it has options to partner with other drug makers to support the business unit. Whatever Pfizer plans to do, it is expected to make a public decision soon. CNBC said “in the next few weeks” Pfizer hopes to reach a conclusion on the unit.