How to integrate GSK and Pfizer to establish the largest OTC enterprise in China?

On December 19, two multinational giants, GKS and Pfizer, officially announced on the official website of their headquarters that GSK and Pfizer would merge their consumer health businesses into a joint venture According to the results of the two companies' consumer health business in 2017, the sales volume of the joint venture has reached 12.7 billion US dollars (about 87.582 billion yuan) The agreement is expected to be completed in the second half of 2019 After the establishment of the joint venture, GSK will own 68% of the shares and Pfizer will hold 32% 1 First in the world, according to the information on GSK's official website, this split is also to prepare for GSK's follow-up action In the future, GSK will have two companies based on the global market in the UK, one focusing on pharmaceuticals and vaccines, the other focusing on consumer health Brian McNamara, the current CEO of GSK consumer health, will be the CEO of the joint venture, and Tobias hestler, the current CFO of GSK consumer health, will be the CFO of the company It is reported that the joint venture will become a leader in such consumer health segments as analgesic, respiratory, vitamin and mineral supply, digestive health, skin health over-the-counter drugs, and oral health The newly established joint venture will cover GSK's comfort, vitalin Panadol, as well as Pfizer's Suntory, Caltech and Advil, are many well-known brands that are very competitive in the consumer health market In addition, from the perspective of OTC global market, the newly established joint venture is also expected to occupy the largest market share, reaching 7.3%, and take the first or second market share in key markets such as the United States, Western Europe, central and Eastern Europe, China, India, Australia, etc By contrast, its strongest competitors account for 4.1% of the global OTC market In April 2017, Emma Walmsley, who previously served as the head of GSK's consumer health business department, officially took over as the head of GSK Meanwhile, she made large-scale internal adjustments, including shutting down 30 pre clinical and clinical ongoing projects, focusing R & D investment on four major disease areas, including HIV, respiratory tract, tumor and immune inflammation, and reducing non core drug R & D and other operations In the third quarter financial conference call in 2017, she further revealed that GSK intends to enhance the competitiveness of consumer health business through acquisition, and Pfizer and Merck's consumer health business will be potential targets of acquisition From the perspective of GSK's performance in 2017, GSK's consumer health business achieved an operating revenue of £ 7.75 billion (RMB 67.416 billion), an increase of 8%, becoming the second growth sector among the three major businesses of GSK In the context of structural adjustment, GSK launched large-scale M & a successively in 2018 Since the beginning of the year, GSK has been preparing for a big show in consumer health On March 27, 2018, GSK and Novartis jointly announced that GSK plans to acquire Novartis' 36.5% stake in their consumer healthcare joint venture for us $13 billion Recently, in the pharmaceutical field, GSK announced on December 14 that it would acquire US Biomedical Company tesero with us $5.1 billion, in order to "accelerate the construction and development of tumor research and development pipeline and add new research and development capabilities" 2 Before Pfizer's sales, GSK was also listed in Merck's consumer health business bidding list, but it ultimately cost P & G Now GSK and Pfizer have a more win-win approach In order to focus on the core business of prescription drugs, Pfizer officially launched the sales process of its consumer health business segment in November 2017, when it was revealed that the sales price was more than $15 billion Pfizer's business sector has attracted many big names In addition to GSK, P & G, Sanofi, Johnson & Johnson, Nestle and some private equity investment companies have expressed their intention to acquire Although there are many bidders, but the price has been high In March this year, Bloomberg News revealed that GSK had chosen to withdraw from the bidding because of the high price of $20 billion Obviously, Pfizer has chosen a way to bring more lasting benefits under the consideration of balanced cost performance, that is, to establish a joint venture with GSK Albert bourla, chief operating officer of Pfizer, who will take over as CEO of Pfizer, said: "the combination of advantages in the segmentation area will be more sustainable and have a broader business scope than the two companies fighting alone We believe that this joint venture is a good opportunity to ensure the future success of Pfizer's consumer health business, while releasing meaningful after tax value for Pfizer shareholders " Emma Walmsley, chief executive of GSK, said the cooperation was an important opportunity to enhance GSK's long-term competitiveness "At the same time, the increased cash flow and expected split will help GSK's future capital and pharmaceutical pipeline investment planning." "Ultimately, our goal is to create two outstanding, UK based global companies, each uniquely competitive to deliver better returns to shareholders and significant benefits to patients and consumers," she added 3、 How to integrate China business? It is worth noting that in October this year, GlaxoSmithKline consumer goods announced the appointment of Xu Jun as general manager of Greater China, who works in GlaxoSmithKline Shanghai office and reports to the head of consumer goods Asia Pacific region GlaxoSmithKline's consumer health business in China is mainly a joint venture company, Sino American SmithKline, which is responsible for production and operation It has a number of well-known products such as fenbide, new Kangtaike, fushuliang and baidobang In addition, on the GSK China website, there are two products, comfort and poly net In other words, GlaxoSmithKline's consumer health business in China is composed of GSK's own business unit and its subsidiaries in China and the United States, and is operated in teams Pfizer China's health medicine business is mainly in Pfizer China The official description of Pfizer China is that the health medicine brands, such as Shancun (multi vitamins and minerals), calcium (calcium supplements) and huifei series (cold, expectorant and antitussive products), led by the Chinese market, are widely recognized by Chinese consumers and experts for their excellent quality From the perspective of this joint venture, first of all, from the reporting level, it is very likely that Pfizer's consumer health business leader will return to Xu Jun, that is, Pfizer team will accept Xu Jun's management In terms of integration, there will be another situation: first, Pfizer China's consumer health business will be directly integrated into GSK's consumer health business; second, it will not be integrated, and it will continue to operate as before, but will only change its reporting affiliation; third, it will be integrated into China and the United States, and the integration is relatively complex As for the third situation, if Sino US Shike is a joint venture company, the possibility is that Sino US Shike will take Pfizer's China health care products business into its pocket in the form of M & A Of course, in other words, as a Chinese subsidiary of GSK and Pfizer, GSK will dilute the equity of TIANYAO group by acquiring Pfizer healthcare products business Overall, however, Pfizer China's healthcare product line is more likely to be integrated into GSK China's consumer healthcare business In addition, from the perspective of personnel, the existing team of Shancun and Caltech will change their affiliation Of course, it's the global joint venture at present As for the adjustment of domestic market structure, it's estimated that it will be a while.