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Friday, 19 September 2014

Glaxo group could be broken up in future

The chief executive of one of South Cumbria’s biggest employers – GlaxoSmithKline – has warned that the group could be broken up in future as he overhauls the huge drugmaker.

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GlaxoSmithKline’s Ulverston site

Sir Andrew Witty says GSK could spin off its consumer healthcare business if it offered more value as a standalone company in future

He said there are no short term plans for this but opened up the possibility of such a move. The Ulverston factory is part of the prescription drugs business so would not be included.

However, in an interview with the Financial Times, he declared confidence that his strategy was on track to deliver fresh growth.

Linked to this, GSK signed a multi-billion pound deal with Novartis to exchange assets and combine their consumer healthcare units.

Novartis acquired GSK's cancer drugs business for £9.5bn and sold its vaccines division, excluding the flu unit, to GSK for £4.2bn.

In an interview with the Financial Times, Mr Witty said: “Through our transaction with Novartis we are making all of our businesses stronger together and stronger as individual components. This will deliver enhanced value through the existing structure and it delivers enhanced optionality for the long run.”

This confirms his attempts to refocus attention on GSK’s long-term growth potential after disappointing second-quarter results this month
 

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