At $54-bn value, interest in GSK's arm may lead to biggest-ever buyout

Advent International, CVC Capital Partners and KKR are among potential suitors for GSK's consumer unit

GlaxoSmithKline’s (GSK’s) consumer unit is drawing interest from private equity firms in what could lead to the biggest buyout of all time, people with knowledge of the matter said. 

The drugmaker’s advisers are informally fielding interest in the operations alongside preparations for a listing, said the people in the know. Advent International, CVC Capital Partners and KKR & Co are among potential suitors evaluating the business, they said.

Blackstone, Carlyle Group, and Permira are also seen as likely suitors for the consumer arm, which could be valued at £40 billion ($54 billion) or more in any deal, the people said. The unit, with brands including Panadol painkillers, Tums antacids and Centrum vitamins, could also attract some of the world’s biggest pharmaceutical and consumer-goods companies.  

Glaxo’s planned split into separate pharmaceutical and consumer businesses has been in the works for almost three years. Chief Executive Officer Emma Walmsley is fending off pressure from activist investors Elliott Investment Management and Bluebell Capital Partners for faster change. The company has fallen behind rivals such as AstraZeneca in developing innovative drugs, and was sidelined in the race to create Covid-19 shots despite being the world’s biggest vaccine maker.

Glaxo said Tuesday that it’s on track to demerge the consumer unit in mid-2022 and repeated that the board will evaluate any options that would boost shareholder value. Glaxo shares rose as much as 4.8% in London trading Tuesday. The stock was up 1.26 per cent at 8.38 pm IST. 

The consumer business has “strong growth prospects which will be further enhanced by its access to the capital markets and ability to set its own strategy” as an independent company, Glaxo said.