GSK To Acquire Novartis' Stake In Consumer Healthcare JV For $13.0 Bln

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GSK said that as well as ending the Novartis venture it would start a strategic review of Horlicks and other consumer nutrition products, sparking another potential industry shake-up.

British drugs giant GlaxoSmithKline has agreed a 13 billion U.S. dollar (£9.2 billion) deal to buy Novartis's stake in its consumer healthcare joint venture.

GSK said the original joint venture agreement gave Novartis the right to require GSK to buy all or part of its stake at any point between March 2 this year and 2035.

Pfizer has been struggling to sell its consumer healthcare business after GSK and Reckitt Benckiser (RB.L) both dropped out of the bidding, while differences in price expectations have also hobbled German drugmaker Merck KGaA's (MRCG.DE) attempts to sell its consumer products unit.

PVG Asset Management Corp boosted its position in shares of GlaxoSmithKline plc (NYSE:GSK) by 304.3% in the fourth quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission.

The transaction is set to completed in the second quarter subject to necessary approvals.

The news comes after previous year, news suggested that Walmsley could sell the business in the United Kingdom, where it is sold as a bedtime drink.

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However, GSK said India remains a "priority market" and it will continue to invest in growth opportunities for its OTC and oral health brands such as Sensodyne and Eno.

GSK had shown interest in Pfizer's consumer product subsidiary, which is estimated to be worth at least 20 million dollars, but the British firm dropped its bid last week.

GSK last week quit the race to buy Pfizer's (PFE.N) consumer healthcare business, endangering an auction the USA drugmaker hoped would bring in as much as $20 billion.

The deal is one of the biggest strategic moves since Emma Walmsley, a former boss of Glaxo's consumer business, became chief executive... GSK said this put option created uncertainty for its capital planning.

Walmsley added that the deal of buying out Novartis also will remove any uncertainty and allows GSK to play its use of capital for other places, especially R&D for pharmaceuticals. Also, insider Sir Roy Anderson purchased 562 shares of GlaxoSmithKline stock in a transaction dated Wednesday, February 7th.

The group said the sale of the 36.5 percent stake will enable it "to further focus on the development and growth of its core businesses".

Novartis chief executive Vas Narasimhan said while the joint venture was performing well, it was the right time to sell a non-core asset at an "attractive" price.

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