Pfizer: $900M termination fee if GSK shareholders don’t approve deal

In a regulatory filing, Pfizer (PFE) offered additional details regarding the stock and asset purchase agreement with GlaxoSmithKline (GSK) to sell the assets and liabilities constituting its worldwide consumer healthcare business to a consumer healthcare business joint venture in exchange for ordinary shares representing 32% of the share capital of the joint venture. GSK will retain a 68% equity interest in the joint venture. The consummation of the transaction is subject to customary closing conditions, including the approval of GSK’s shareholders pursuant to U.K. law and the receipt of required antitrust approvals. Each party is required under the purchase agreement to take all actions necessary to obtain such required antitrust approvals. The purchase agreement contains certain termination rights for both Pfizer and GSK, including the right to terminate the agreement if the transaction is not consummated by September 30, 2019, subject to extension by either party to March 31, 2020 in certain circumstances. In addition, in the event that Pfizer terminates the purchase agreement in connection with a failure to obtain GSK shareholder approval or an adverse change of recommendation of the GSK board of directors, then GSK will be required to pay Pfizer a termination fee of $900M in cash, the filing stated.
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