GlaxoSmithKline is to bid more than $15 billion for the consumer healthcare business of US rival Pfizer, sources said this morning.
The move raises the bar in the auction for the $3.9-billion-a-year over-the-counter medicines business, whose top-selling brands include Listerine mouthwash and Sudafed decongestant.
Previously, analysts had estimated the business would sell for around $14 billion, or 3.6 times annual sales, which was the multiple paid by Reckitt Benckiser
for Boots Healthcare International last year. Glaxo lost out in that sale.
Industry sources said yesterday that Glaxo, along with Johnson & Johnson and Reckitt, were frontrunners to acquire the Pfizer business after the CEO of Colgate-Palmolive Co played down talk of its interest.
Final bids for the division are due on June 6th.
A bid of more than $15 billion from Glaxo, first reported in the Financial Times, would underscore the value consumer health companies put on a prize asset in a fast-consolidating sector.
Glaxo shares were 0.5 per cent lower at £14.88 early this morning, the biggest losers in the FTSE 100 index, which added 0.6 per cent.