Horlicks sell off heralds new era for Glaxo: Jobs cut, factories closed and key brands axed… Britain’s top female boss begins her reign
British pharmaceuticals giant GlaxoSmithKline has announced plans to sell its Horlicks drinks business in the UK and cut 320 jobs.
In its first significant move under new chief executive Emma Walmsley, the company also ditched proposals for a factory in Cumbria and revealed it was reviewing its antibiotics business, part of which could be sold.
Instead GSK committed to spending hundreds of millions of pounds on expanding manufacturing sites for respiratory and HIV medicines.
GlaxoSmithKline chief executive Emma Walmsley has announced plans to sell its Horlicks drinks business in the UK and cut 320 jobs
The move underlined Walmsley’s pledge to simplify Britain’s biggest drug-maker and focus on its strengths.
The 48-year-old mother of four took over at GSK in April, making her the most powerful woman in British business.
GSK said it would close the Slough factory that makes Horlicks and offload its sport and bodybuilding supplement firm Maxi Nutrition.
Some manufacturing at its Worthing site is also to be outsourced and plans for a new £350million factory in Ulverston, Cumbria, have been abandoned.
The overhaul will lead to the loss of 320 jobs – just under 2 per cent of its 17,000-strong workforce in Britain.
GSK is keeping hold of the Horlicks brand in India and South East Asia where the malted drink is hugely popular.
But the strategic review of its antibiotics business could end in further disposals – including the sale of a factory it already owns in Ulverston as well as sites at Barnard Castle in the North East and Verona in Italy.
GSK stressed none of the decisions were linked to the UK’s impending exit from the European Union.
Roger Connor, GSK’s president of global manufacturing and supply, said: ‘We have a substantial manufacturing presence in the UK and continue to support the network with new investment.
At the same time, we have had to make some decisions which we know will cause uncertainty for some of our employees.’
Global affairs president Philip Thomson added: ‘We are continuing to invest in science and our core businesses in the UK and we continue to see it as an attractive place for the life sciences industry.’
Following the announcement, shares in GSK closed up 0.7 per cent, or 10.5p, at 1610.5p.
Walmsley said in April that she planned to put the development of blockbuster drugs at the heart of the FTSE 100 firm’s future.
She wants to return to its glory days of science and innovation, which in the past saw it produce leading asthma drug Advair.
She is expected to outline more of her vision when the company’s second-quarter results are posted next week.
Her approach marks a change of direction for GSK, which under previous boss Sir Andrew Witty built up consumer health and vaccine units alongside its core pharmaceuticals. It has, however, struggled to deliver decent returns to investors for about five years.
Household goods giant Reckitt Benckiser has agreed to sell food brands including French’s mustard to the maker of Schwartz spices for £3.2billion.
US group McCormick fought off a number of rival bidders to secure the British firm’s food business in a move that will propel it to the number one position in America’s condiments market.