Teva, Procter & Gamble terminate OTC venture
Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) has announced that it has agreed with Procter & Gamble Company [NYSE: PG] to terminate the PGT Healthcare partnership that they founded in 2011 to market OTC (Over The Counter) medicines. The separation will take effect July 1, 2018 subject to receipt of applicable regulatory approvals. No significant (material) net financial transfer between Teva and P&G will result from the dissolution, Teva added, Globes reports.
The amicable separation follows Procter & Gamble's $4.2 billion acquisition of Merck KGaA's consumer health unit.
PGT Healthcare had grown into a significant presence in over 50 countries, mainly in Europe and Asia, using market-leading brands such as Vick’s and Ratiopharm. However after nearly seven years working together, the companies concluded that their priorities and strategies were no longer closely aligned. Teva said that each company would take back its own brand and product assets to re-establish independent OTC businesses.
Teva EVP global marketing and portfolio Sven Dethlefs said, “We have significantly benefited from the PGT partnership and we are parting on good terms. We will continue to build our OTC business, based on trusted brands, as a growing and long-term key business for Teva. It is a step in our wider process to bring integration and focus, and it enables us to better leverage synergies between our OTC and Generics businesses. The move creates a solid platform for a strong Teva OTC business, using the assets returning from PGT and the OTC brands acquired primarily through Actavis in 2016.”
P&G president global personal health care Tom Finn said, “The PGT Healthcare joint venture was highly successful but the decision to dissolve is in the best interest of both parties. We thank the Teva employees who have partnered with us and we wish Teva well as they operate their independent OTC business in the future.”
Teva said that it does not expect the separation to have a material impact on its 2018 financial outlook. The company will merge its OTC interests returning from PGT with a portfolio of OTC assets acquired in 2016 via the Actavis acquisition. In 2017, the combined sales from Teva’s PGT OTC products and Teva non-PGT OTC products were about $1 billion.