GlaxoSmithKline off loads more OTC brands

Following its earlier announcement that it intends to divest non-core Consumer Healthcare over-the-counter (OTC) products mainly in the USA and Europe with aggregate sales of approximately £500 million ($785 million), UK pharma giant GlaxoSmithKline (LSE: GSK) revealed yesterday that it has reached agreement to divest the previously identified brands in Europe to Belgium-based Omega Pharma (OME: BB) for £470 million euros ($616.6 million) in cash.

The brands being divested include Lactacyd, Abtei, Solpadeine, Zantac, Nytol and Beconase and generated sales of around £185 million in 2011. It is expected the divestment will complete in the second quarter of 2012, subject to regulatory approvals. The net cash proceeds from the transaction are expected to be around £310 million, which will be returned to shareholders during 2012.

The net profit on disposal of the assets (including all transaction costs) is estimated to be approximately £230 million (pretax), £190 million (post-tax). The pretax profit will be recorded in Other Operating Income following completion of the disposal and will be excluded from core operating profit and earnings per share.