LONDON: GlaxoSmithKline Plc is considering a break-up of the group after investors pressed the company’s board to spin off its consumer division, the Financial Times reported on Friday. GSK Chairman Philip Hampton has been in discussions with the group’s biggest shareholders about the creation of a standalone pharma and vaccines company in the medium term, the FT reported, citing sources. The move could happen within two or three years, the report said. on.ft.com/2mwBuYT
One of the company’s top ten shareholders, whom the FT did not name, acknowledged having conversations with the GSK chairman, adding that shareholders “don’t quite believe in the company.” Some investors have long called for the group’s break-up, arguing that it would crystallise value for component businesses and that there are limited synergies between consumer and pharma. A GSK spokesman said the group’s priority is to improve the performance of its pharmaceutical business, especially research and development. The company is set to outline its new approach for the division next week.
The company’s “3 business structure” offers stability to its earnings and helps in free cash flow generation, the spokesman said in a statement.
In April, GSK said it was divesting its rare disease gene therapy drugs to private biotech company Orchard Therapeutics. — Reuters
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