11 January 2019 - Deborah Wilkes
2018 was a truly transformative year for the global consumer healthcare/OTC industry, as four of the top 10 players were involved in mega deals.
The new OTC Deal Trends 2018 Briefing from OTCToolbox points out that GlaxoSmithKline (GSK) and Pfizer announced in December 2018 that they had agreed to combine their consumer healthcare businesses into a “world-leading” joint venture with annual sales of around GBP9.8 billion (USD12.7 billion).
Meanwhile, Procter & Gamble (P&G) announced in April 2018 that it was acquiring Merck KGaA’s Consumer Health business for EUR3.4 billion (USD3.9 billion) and would terminate its PGT Healthcare joint venture with Teva Pharmaceutical on 1 July 2018.
Furthermore, Japan's Taisho Pharmaceutical announced in December 2018 that it was set to acquire Bristol-Myers Squibb’s French consumer healthcare business UPSA for USD1.6 billion.
Reshapes the top 10 rankings
Andy Tisman, global senior principal for Consumer Health at IQVIA, told the OTCToolbox Briefing that the three big deals announced in 2018 would significantly change the top 10 global OTC rankings.
Quoting IQVIA data for the year ended 30 September 2018, Tisman pointed out that the proposed joint venture between GSK and Pfizer would combine the world’s second and fifth largest OTC businesses. “The deal will create by far the leading global OTC player, with a global market share of 7.3%,” he said, adding that the joint venture would be “approximately 50% larger than the next nearest player”.
Meanwhile, Taisho would move up the rankings from 10th to seventh position with a market share of 1.6%.
P&G, which completed the acquisition of Merck Consumer Health at the beginning of December 2018, sits in seventh place with a market share of 2.1%.
Mega deals reshaping the global consumer healthcare/OTC industry was one of the key deal trends in 2018, comments the OTCToolbox Briefing, as several pharmaceutical companies divested consumer healthcare/OTC businesses.
Digital technology and e-commerce assets
Other significant trends during 2018, says the OTCToolbox Briefing, included big deals involving vitamins, minerals and supplements (VMS) assets; private-equity firms buying and selling assets; and interest in digital technology and e-commerce assets.
There were also many companies buying and building.
However, some acquirers are struggling in the wake of older mega deals, notes the OTCToolbox Briefing.