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GlaxoSmithKline PLC ADR GSK

Rating as of

Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

GlaxoSmithKline Rejects Unilever’s Offer for the Consumer Healthcare Unit

Damien Conover, CFA Sector Director

Analyst Note

| Damien Conover, CFA |

GlaxoSmithKline announced the rejection of Unilever’s GBP 50 billion offer for its consumer healthcare group (two thirds owned by Glaxo and one third owned by Pfizer), but we are skeptical the unit can create much more value in other scenarios. With the rejection in place, Glaxo appears to remain on the path to divest the consumer unit as a stand-alone company in mid-2022 and we don’t expect any changes to Glaxo’s fair value based on the news. While the unit holds strong brand power that supports Glaxo’s overall wide moat, we don’t expect any major changes to Glaxo’s moat rating following the divestment of the consumer healthcare unit in mid-2022 since the majority of the firm’s moat is protected by patents in the drug and vaccine division.

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Company Profile

Business Description

In the pharmaceutical industry, GlaxoSmithKline ranks as one of the largest firms by total sales. The company wields its might across several therapeutic classes, including respiratory, oncology, and antiviral, as well as vaccines and consumer healthcare products. Glaxo uses joint ventures to gain additional scale in certain markets like HIV and consumer products.

Contact
980 Great West Road
Brentford, Middlesex, TW8 9GS, United Kingdom
T +44 2080475000
Sector Healthcare
Industry Drug Manufacturers - General
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 94,066

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