P&G prescription medicines sale 'positive' for North East
PROCTER & Gamble's £1.9bn sale of its prescription medicines business to Irish pharmaceuticals firm Warner Chilcott could have positive repercussions for its North East businesses.
P&G, which employs around 1,500 people in the North East in businesses including consumer products, research, finance and administration, sold its branded pharmaceutical products and prescription drug manufacturing plants in Germany and Puerto Rico in the deal. It said the majority of affected P&G staff would be transferred to Warner Chilcott.
None of P&G’s North East interests are involved in the deal, although the sale could prove beneficial to the region in the longer term.
The company has deep roots on Tyneside, where it has three sites. The Newcastle Technical Centre has been based in Longbenton for 50 years, and has been responsible for the development of household names in the consumer products sector such as Ariel and Fairy. It also manufactures fragrances and hair conditioning products in Seaton Delaval and has offices in the Cobalt Business Park, in North Tyneside, which house staff from the finance department, IT and consumer relations teams.
Although the company’s regional interests are not involved in the Warner Chilcott deal, Andy Penman, an equities analyst with Barclays Wealth, said the pharmaceuticals sell-off is likely to be positive news for P&G in the North East.
He said: “P&G did say earlier this year that it was planning to make 2010 an investment year – and their year runs from July to June so it has already started.
“They said they planned to spend an incremental $1bn (£610m) in investment spending. They are refocusing, having sold off some of their under-performing businesses and now this sale to Warner Chilcott.
“It is clear they are refocusing on consumer products and also investing in the business. All of this bodes very well for putting money into the existing businesses – and that bodes well for their existing operations in the North East.”