GlaxoSmithKline Plc said it agreed to sell some over-the-counter drug brands in Europe to Omega Pharma for 470 million euros ($613.8 million) as it streamlines its consumer business.
The brands, which include Lactacyd skin cleanser, Zantac for heartburn, and the Nytol sleep aid, generated about 185 million pounds ($290 million) in sales last year, the company said in a statement today. Glaxo is still in talks to sell brands in markets outside of Europe and North America, and to sell the global rights to the Alli weight-loss treatment, according to the statement.
The cash proceeds, which Glaxo plans to return to shareholders this year, will be about 310 million pounds, the company said. Glaxo said in December that it would sell 17 over-the-counter medicine brands in the U.S. and Canada to Prestige Brands Holdings Inc. for $660 million. The 242 million pounds in net cash proceeds from that sale will fund a 5-pence supplemental dividend to be paid in the fourth quarter.
“The objective of this divestment process is to generate attractive returns for shareholders as well as simplifying our ongoing consumer business and enabling it to focus on its priority brands and markets,” Chief Financial Officer Simon Dingemans said in the statement.
Chief Executive Officer Andrew Witty is working to expand the company’s consumer business in oral health, wellness and nutrition in emerging markets, and plans to keep fast-growing brands such as Sensodyne toothpaste and Panadol pain reliever. The over-the-counter brands that have yet to be sold had revenue of about 60 million pounds last year, Glaxo said.
The sale of Alli has been delayed because of a temporary supply disruption, Glaxo said.
Omega Pharma is an over-the-counter health-care company based in Nazareth, Belgium.