GSK Withdraws From $20bn Race for Assets of Pfizer

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A day after Reckitt Benckiser, a fellow FTSE 100 company, also dropped out from the bidding, GlaxoSmithKline has pulled out from a $20bn (£14bn) contest to acquire the consumer healthcare division of Pfizer.

The said move places the sale plans of Pfizer for its unit in jeopardy with no other major company connected with a bid after Nestlé and Johnson & Johnson also pulled out at an earlier stage.

The consumer health division of Pfizer manufactures products including Centrum vitamins, Seven Seas supplements, and Chapstick lip balm.

The United States giant said that it would “continue to evaluate” prospects for the division, including a sale, a spin-off, or other transaction, or ultimately retaining the unit. It is expected to come up with a decision by the end of 2018./

Emma Walmsley, the chief executive of GSK, said that her company would continue to review possible opportunities for takeover. However, she said that the company “must meet our criteria for returns” and not jeopardise the commitment of the firm to paying shareholders with a dividend.

The investors welcomed the said news, sending the shares of the company up by almost 4 percent. The shares of Pfizer were down by 0.7 percent in early trading in New York.

Reckitt makes cleaning and healthcare products including Air Wick and Clearasil. Yesterday, the company said that it had pulled out from the contest as it did not want to purchase the whole division and that the firm had failed to convince Pfizer to sell only a part of it. Reportedly, Reckitt was most interested in acquiring the Advil pain relief brand.

The shares of Reckitt also soared following the announcement, closing yesterday up by 4.8 percent.