Will Glaxo spin off consumer arm to focus on its pharmaceuticals and vaccines?

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Will Glaxo spin off consumer arm to focus on its pharmaceuticals and vaccines?

Hugo Duncan for the Daily Mail

GlaxoSmithKline could spin off its consumer arm to focus on its pharmaceuticals and vaccine businesses, it was claimed last night.

Philip Hampton, the British drugs giant’s chairman, is reportedly considering the move after talks with major shareholders.

Such a shake-up was called for by fund manager Neil Woodford last year but rejected by the company at the time.

Shake-up plan: GlaxoSmithKline bosses are rumoured to be considering spinning off the firm's consumer arm 

Shake-up plan: GlaxoSmithKline bosses are rumoured to be considering spinning off the firm’s consumer arm 

However three top-ten shareholders in Glaxo have now had discussions about the proposal with Hampton, according to the Financial Times.

The change would be the biggest shake-up yet under Glaxo boss Emma Walmsley, who took over last year. One shareholder told the Financial Times: ‘It has been a question on the table for a long time.

‘We have been asking, ‘What are you? Are you pharma? Are you consumer goods?’.

‘Emma came in with a fresh pair of eyes — there is potential for thinking that [a spin-off] would make sense.

‘We have spoken to the board about it.’

If the spin-off were to go ahead it would take place within three years.

Walmsley has sought to take the company back to its roots, focusing on developing blockbuster drugs, and has carried out a ruthless cull of management. 

Soon after taking over as the chief executive, she said she wanted to make Glaxo leaner and make better use of data and technology.

Walmsley is the former head of the group’s consumer division and has said it still has room to grow, but earlier this year passed up an opportunity to snap up rival Pfizer’s consumer business.

Last night, a Glaxo spokesman said: ‘Our priority for the group is improving performance in the pharmaceutical business, especially pharma research and development.

‘We believe the three-business structure of the group offers significant opportunities. But as we have consistently said, this is subject to each business continuing to perform competitively and having access to capital.’

 

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