GSK signs final deal to divest non-core OTC brands

GlaxoSmithKline Plc (GSK) has signed a £164m deal with Aspen Pharmacare to divest its non-core over-the-counter (OTC) brands in international markets.

The latest agreement, which followed the divestment in the US, Canada and Europe, is part of company’s announcement in February 2011 to divest non-core OTC brands to focus on its priority brands and markets.

The proposed divestment will include brands such as Phillips MOM, Solpadeine, Dequadin, Cartia and Zantac, which generated sales of around £60m in 2011.

Net proceeds of the divestment, which is estimated to be £135m, will be returned to shareholders in 2012.

Since Aspen is an associate of GSK, the pre-tax net profit of the transaction is forecasted to touch £105m, and the post-tax to reach £90m.

Prior to this, GSK signed two agreements to divest the non-core OTC brands with Prestige Brands in the US and Canada in December 2011 for £426m; and with Omega Pharma in Europe in March 2012 for £391m, taking the total gross cash proceeds from the divestment, including the international markets, to £981m and the net cash proceeds to £690m.

While the divestment for US and Canada will be closed this month, the process for Europe and international markets is expected to complete in the second quarter of 2012, subject to regulatory approvals.

GSK said that it also intends to divest alli, which is being delayed pending the resolution of a temporary third party supply interruption.