P&G Updates: Teva JV Aims for $4 Billion by 2020

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PG: Procter & Gamble logo
PG
Procter & Gamble

Procter & Gamble (NYSE:PG) recently concluded the deal with Teva Pharmaceuticals for the formation a consumer health care joint venture, PGT Healthcare after receiving approval from anti-trust authorities and is looking at double digit growth opportunity in the OCT drugs business. It competes with Unilever (NYSE:UL), Kimberly-Clark (NYSE:KMB) and Colgate-Palmolive (NYSE:CL) in the beauty, personal care and consumer goods category and will be competing with Johnson & Johnson (NYSE:JNJ) in the OTC segment.

See our complete analysis for Procter & Gamble’s stock.

P&G-Teva JV: PGT Healthcare

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P&G and Teva have recently concluded the deal for the formation a consumer health care joint venture, PGT Healthcare, that will focus on developing and selling branded over-the-counter (OTC) medicines. The deal was first announced in March 2011 and recently received approval from anti-trust regulators in North America and Europe. It will operate in markets outside of North America to develop branded OTC drugs and will also develop new brands for the North American market. PGT Healthcare will kick off with $1.3 billion in annual sales from the companies’ existing products and expects to achieve double-digit annual growth rates to reach $4 billion in sales by 2020, by expanding into new markets and product categories. Read more here.

Q3 Recap

P&G recently announced its Q1 results. It continues to face significant downward pressure on its gross margins because of higher input commodity inflation that is weighing over pricing measures. Yet, it maintained or improved market share in majority of its product categories. Read more here.

We value Procter & Gamble with a $71.50 Trefis price estimate of its stock, at almost a 10% premium to its current market price.

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