Pfizer consumer health sale: Nestlé, GSK and Reckitt Benckiser lead as J&J 'pull out'

By Nathan Gray contact

- Last updated on GMT

iStock / pichet_w
iStock / pichet_w
Healthcare giant Johnson & Johnson has left the race to buy Pfizer’s consumer health unit – leaving GlaxoSmithKline, Nestlé and Reckitt Benckiser as favourites for the €16 billion deal.

The possible sale of Pfizer’s consumer health unit – which includes international nutrition and OTC brands like Centrum and Emergen-C – was first raised by the company back in October 2017.

At the time, NutraIngredients​ reported​ on speculation that interested parties could include Reckitt Benckiser, Procter & Gamble (P&G), GlaxoSmithKline (GSK), Johnson & Johnson (J&J), Abbott, and Nestlé.

Now, Johnson & Johnson have confirmed that the company is no longer in the race to buy the division – ahead of a reported February 1st​ deadline for non-binding offers to be submitted.

According to reports in Reuters​ and FiercePharma​, J&J was seen as one of the strongest contenders for the deal – and had initially worked with Goldman Sachs on a possible bid, before deciding to pull out.

In an unusual step, J&J itself has now confirmed that it is not in the running for the Pfizer business unit.

“While we would normally not comment on market speculation or rumours, in this instance we refute assertions that we are in negotiation for Pfizer’s consumer business,”​ J&J’s vice president of media relations told Reuters​ and FiercePharma​.

Deadline looming?

While Pfizer has not made any details of the sale process public, several sources close to the situation have suggested the company is looking for overs over $20 billion USD (€16 billion EUR) for the consumer health division.

With an apparent deadline of February 1st​ for interested parties to submit offers, analysts and sources suggest major interest from GSK, Reckitt and Nestlé.

Reuters sources said the deal could be a ‘game-changer’ for rival drug maker GSK or consumer goods group Reckitt, as it would make them one of the biggest global players in the rapidly growing and lucrative consumer health market.

Meanwhile a bid from the world’s biggest food company Nestlé cannot be ruled out, say analysts. Nestlé CEO Mark Shneider has a wealth of experience in the healthcare sector and has already signalled an intention for greater focus on nutrition, health and wellness.

Recent deals involving Nestlé reflect this strategic shift, with the company recently selling its U.S. confectionery business to Ferrero for $2.8 billion​, and reportedly seeking a deal to buy Merck KGaA’s consumer health unit in a €4 billion deal​.

While Pfizer’s range of nutrition and supplement brands like Centrum, Caltrate and Emergen-C could be a good fit with Nestlé’s shifting nutrition and wellness focus, some sources also suggest that other brands in the Pfizer unit – such as Advil painkillers and Robitussin cough medicine – may be too far removed from its core focus on food and nutrition.

Pfizer declined to comment on the sale process, only adding that any decision on its consumer health business would be made in 2018.

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