GlaxoSmithKline (GSK) announced that it has entered into an agreement with AstraZeneca to acquire a number of leading over-the-counter (OTC) medicines predominantly sold in Sweden, including Alvedon. This acquisition reinforces GSK's ongoing efforts to invest in and expand its consumer healthcare business as part of the company's strategy to globalise and diversify.
John Clarke, president of GSK Consumer Healthcare, said, "This agreement reflects our growth strategy of building global brand franchises through acquisitions as well as organic growth. Specifically, this will strengthen our regional position in analgesic medicines, one of the largest categories in the global over-the-counter market. We expect Alvedon will benefit from the investments we are making in our global Panadol analgesics brand franchise around innovation and marketing. We will continue to seek similar opportunities."
Under the terms of the agreement, GSK will acquire AZ Tika, a company wholly-owned by AstraZeneca, for approximately £146 million (Swedish Krona SEK 1,770 million) in cash. AZ Tika's portfolio of products have strong margins and include market-leading brands such as Alvedon, the leading analgesic treatment in Sweden, Minifom, for GI disorders, and Nezeril and Nasin, which are decongestant brands. The brands are sold in the Nordic region, with the majority of sales concentrated in Sweden. In 2007, the product portfolio recorded net sales of approximately £27 million (SEK 335 million).
GSK will realise sales and cost synergies through the addition of the AZ Tika brands into its existing portfolio. The sale and purchase agreement is subject to clearance from the Swedish Competition Authority.