GlaxoSmithKline consumer arm attracting private equity interest – report

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Pressure is building again on GlaxoSmithKline PLC (LSE:GSK)’s management with reports today that several private equity firms are looking at a deal for its consumer business arm.


According to Bloomberg, Advent International, CVC Capital Partners and KKR are the private equity firms evaluating the business while the wire also suggests Blackstone, Carlyle Group and Permira might also be interested in a deal around the GBP40bn mark.


GlaxoSmithKline’s chief executive Emma Walmsley is already under fire from two activist investors – Elliott Management and Bluebell – over her plans to demerge the consumer arm from the pharma and vaccines operation.


Walmsley, who wants to rebuild the pharma divisions drugs pipeline and re-establish the business as a top-tier drug developer, has set in train a timetable that will see the consumer unit split off in mid-2022, but has said it would look at other options if they materialise.


Elliott has already called for the consumer unit to be sold as well as questioning whether Walmsley is the right person to head the new pharma division.


Glaxo’s consumer business is one of the world’s largest, generating annual sales of more than GBP10bn last year, but is regarded as a solid earner and lacks the blockbuster potential of drug development.


Bluebell, meanwhile, has also reportedly called for chairman Jonathan Symonds to be replaced.


According to Bloomberg, while the private equity interest is ongoing there is no certainty it will lead to a transaction, sources it spoke to said.

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