GSK pulls out of $20bln race for Pfizer

LONDON: GlaxoSmithKline has quit the race to buy Pfizer’s consumer healthcare business, endangering an auction the U.S. drugmaker hoped would bring in as much as $20 billion.

It was not immediately clear whether there were other offers for the business, which includes Advil painkillers and Centrum vitamins, following this week’s deadline for binding bids.

GlaxoSmithKline (GSK), which announced its withdrawal on Friday, was seen as the frontrunner to buy the assets after Reckitt Benckiser left the race late on Wednesday. Johnson & Johnson stepped away from the auction in January.

A source familiar with the matter said GSK declined to make a final bid for the assets in the end.

“While we will continue to review opportunities that may accelerate our strategy, they must meet our criteria for returns and not compromise our priorities for capital allocation,” GSK Chief Executive Emma Walmsley said in a statement. GSK shares rose nearly 4 percent, as investors’ concerns about a potential dividend cut eased.

Pfizer said on Friday it continued to evaluate potential alternatives for the business, which include a spin-off, sale or other transaction, as well as retaining it.

“We have not yet made a decision, but continue to expect to make one in 2018,” a spokesman said. Sources familiar with the matter said on Thursday it was possible there were other bids.