GlaxoSmithKline and Pfizer merge healthcare arms

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Painkiller brands Panadol and Anadin will be bought under one roof under a giant deal between drug firms GlaxoSmithKline and Pfizer.

The firms are combining their consumer healthcare businesses into one firm with annual sales of £9.8bn ($12.7bn).

Other brands involved in the deal include Aquafresh toothpaste and Chapstick lip balm.

The deal still needs approval by shareholders and regulators. Shares in GSK rose 7% on the news.

GSK's consumer healthcare division used to operate as a joint venture with Swiss firm Novartis, but it acquired full control of the business nine months ago.

GSK, which will have 68% of the new business, said the deal was a "compelling opportunity" to build on that earlier buyout of Novartis and deliver stronger sales.

"Through the combination of GSK and Pfizer's consumer healthcare businesses, we will create substantial further value for shareholders," said GSK chief executive Emma Walmsley.

"Ultimately, our goal is to create two exceptional, UK-based global companies, with appropriate capital structures, that are each well positioned to deliver improving returns to shareholders and significant benefits to patients and consumers."

The joint venture will go by the name of GSK Consumer Healthcare. Apart from GSK's Nigerian subsidiary, which is excluded from the deal, it will operate in all countries where GSK and Pfizer have a presence.

GSK will have six directors on the board, while Pfizer will have three. The new firm will be spun off and listed separately on the London stock market within three years.