GlaxoSmithKline exited the US life sciences company Quest Diagnostics by selling its entire stake for $1.7 billion, the company announced on Tuesday.
GSK offloaded its remaining 16.5 percent stake in the company, originally acquired in 1999 and said it expects the sale to generate $1.1 billion after tax.
Julian Heslop – Finance Director at GSK said: “Whilst we have been pleased with our investment in Quest Diagnostics, we have been considering the sale of our remaining position in the company for some time”.
Adding that GSK planned to exit its non-core businesses, Mr. Heslop added: “We have decided that now is a good time to take advantage of favourable market conditions, thereby releasing funds from one of our non-core assets. This divestment demonstrates our focus on generating attractive returns for our shareholders and our ability to monetise significant gains when appropriate”.
GSK had originally bought 29 percent stake in the New Jersey based clinical laboratories business group and has been progressively reducing its stake in the company for the last few years. Last year it had divested its stake from 19.6 percent for the third time from 16.5 percent.
The last available full year result of 2009 shows that Quest had posted a pre-tax profit of $1.2 billion on sales of $7.5 billion. The company manufactures diagnostics tools for cardiovascular diseases, Cancer, thyroid disorders, and infectious diseases.
GSK’s decision comes a day after the world’s biggest pharmaceutical company Pfizer announced its plans to close the British research centre and cut up to 2,400 jobs.
The Sandwich based half a century old drug development centre had boasted of producing blockbuster drugs such as Viagra and symbolised British skills in drug development.
The previous and the current government attaches great important to life sciences for economic growth and yesterday’s decision shocked the country’s research and biotech community.