The Procter & Gamble Company and Teva Pharmaceutical
Industries Ltd. today announced the signing of a master agreement to create a
partnership in consumer health care by bringing together both companies’
existing over-the-counter (OTC) medicines and complementary capabilities to
accelerate growth.
This new business model combines P&G’s strong
brand-building, consumer-led innovation and go-to-market capabilities with
Teva’s broad geographic reach, its experience in R&D, regulatory and manufacturing
and its extensive portfolio of products.
“This unique partnership positions P&G and Teva to
be a leading player in the consumer health care industry,” said Bob
McDonald, chairman of the board, president and chief executive officer of
P&G. “This is a remarkable opportunity to accelerate growth for both
companies’ OTC businesses. Together, we will serve more consumers in more parts
of the world, more completely, by increasing access to high quality, affordable
over-the-counter medicines.” “We are extremely pleased to be joining
forces with Procter & Gamble, the world leader in brand building and
innovative go-to-market capabilities,” said Shlomo Yanai, Teva’s president
and chief executive officer. “This partnership will create value by
immediately expanding the number of channels and geographies in which each
company’s OTC products will be sold. Together, we will develop a new platform
with the potential to reshape the entire global OTC market.” Annual Sales
of More Than $1 Billion The partnership will include a joint venture that
combines the companies’ OTC businesses in all markets outside of North America.
The markets included in the joint venture generated sales of
more than $1 billion in 2010.
Teva will provide access to its unparalleled portfolio of
medicines and global R&D and manufacturing expertise and infrastructure. As
part of the partnership, the companies intend for Teva to take global responsibility
for manufacturing to supply the joint venture markets and P&G’s existing
North American business.
Significant Growth Potential
OTC health care medicines offer significant growth potential
for both companies in developed and emerging markets. The companies expect to stimulate
faster growth in the nearly $200 billion OTC market as the global population
continues to age, consumers increasingly focus on quality of life and wellness
and more consumers personally manage their family’s health care choices and
rely on trusted brands. In addition, economies in emerging markets continue to
grow quickly and consumers are gaining purchasing power. All of these factors
will contribute to continued strong growth of the global consumer health care
market.
This partnership will enable both companies to generate
greater value from their existing OTC businesses. By broadening its OTC product
offerings, Teva will further strengthen its position with major pharmacy
customers around the world. For P&G, the partnership will accelerate global
expansion of its leading OTC brands such as Vicks, Metamucil and Pepto-Bismol.
In addition, the partnership will exploit opportunities to
develop Rx-to-OTC switches to create new trusted brands to be marketed worldwide,
including in North America.
The transaction is expected to close in the fall of 2011
subject to receipt of required regulatory approvals.
