J&J buys Pfizer consumer health division for $16 billion
pharmafile | June 27, 2006 | News story | Sales and Marketing |Â Â Â
Healthcare conglomerate Johnson & Johnson is to buy Pfizer's consumer health division for more than $16 billion, a move which will create a new goliath in the over-the-counter sector.
Pfizer Consumer Healthcare's business of consumer health care and over-the-counter products earned it $3.9 billion in 2005, but the company has sold the division on to concentrate on its more profitable prescription medicines business.
For its $16 billion, J&J will acquire global, market-leading brands such as Listerine mouthwash products, Nicorette smoking cessation treatments, and other top-selling brands, including Sudafed, Zantac and Benadryl.
"This combination creates the world's premier consumer health care company," said William Weldon, chief executive of Johnson & Johnson.
"Our consumer business has a long tradition of outstanding performance and a proven track record in growing consumer brands at above-category levels through innovation. This acquisition builds upon our broad base in health care products and our leadership objectives in the consumer, pharmaceutical and medical devices and diagnostics markets."
J&J is a major player in the prescriptions medicines business, with brands such as the schizophrenia drug Risperdal and Remicade in its portfolio. Pfizer's sale of its OTC business now means J&J is one of just a few companies in the field which spans the full range of healthcare products from OTC and consumer to pharmaceutical, and medical devices and diagnostics.
Over the last decade or so, many pharmaceutical companies have chosen to sell off non-prescription medicine parts of the business, and Pfizer says it will re-invest the billions from the sale into re-purchasing stock, buying new pharma-related businesses and spending on in-house R&D.
"We will use the proceeds to both invest in our future and build value today," said Pfizer vice chairman David Shedlarz.
"To drive long-term growth, for example, we have acquired products, product candidates and technologies in priority areas such as Alzheimer's disease, diabetes, obesity and infectious diseases in just the last 12 months."
The sale of the Pfizer business generated considerable demand from companies in the field, including GlaxoSmithKline and Colgate-Palmolive.
Pfizer's UK consumer business is based at the same site as its prescriptions medicines business in Walton Oaks in Surrey. Johnson & Johnson is based in nearby Maidenhead, but there has been no announcement so far regarding plans for the UK business post-merger.
