Summary
Pfizer is combining its consumer business unit in a smart deal with that of GSK.
I like the deal which looks smart but is too small to impact Pfizer in a big way.
Shares have seen some solid gains in recent times as the company is seeing steady but still non-inspiring growth, supported by a solid balance sheet and modest valuation multiple.
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Pfizer (PFE) announced a big tie-up with its British counterpart GlaxoSmithKline Plc (GSK) for their consumer healthcare businesses, each contributing iconic brands to create a $12.7 billion giant. I like the deal as it seems that Pfizer will get a disproportionate ownership stake, benefits from synergies, and will be granted the opportunity to sell its stake in the coming years. Hence, I understand why management pursues this route at these terms, although the relatively small size means that it will not change the needle in a huge way.
Nonetheless, and despite a solid run higher over the past year, Pfizer remains a solid play with a non-demanding multiple and clean balance sheet, although growth has not been too inspiring as well, of course.
