GLAXOSMITHKLINE and Swiss rival Novartis are to create a consumer healthcare powerhouse as part of a string of deals in the pharmaceuticals sector today.

The tie-up will create a world-leading business with annual revenues of around 6.5 billion from Glaxo products such as Aquafresh and Beechams and antiseptic range Savlon and cough and cold brand Tixylix from Novartis.

In addition, Glaxo is selling its oncology portfolio and related research and development activities to Novartis for up to £9.5bn and buying the Swiss firms vaccines business for an initial £3.1bn.

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Separately, Novartis is to sell off its animal health division to Lilly for about £3.2bn and also plans to sell its flu business.

The three-part transaction involving Glaxo and Novartis is expected to complete during the first half of next year and will result in a £2.4bn return of capital to Glaxo shareholders.

Novartis employs more than 3,000 people across nine sites in the UK, including at its regional headquarters in Frimley, Surrey. Glaxos main consumer healthcare sites are at Maidenhead, Berkshire, and Weybridge, Surrey. It employs about 1,000 people at its factory in Barnard Castle, County Durham. 

Glaxo chief executive Sir Andrew Witty said: "Opportunities to build greater scale and combine high quality assets in vaccines and consumer healthcare are scarce.

"With this transaction we will substantially strengthen two of our core businesses and create significant new options to increase value for shareholders."

Glaxo shares opened 5 per cent higher following the announcement, while rival AstraZeneca was up 8 per cent in the wake of speculation that it is in the takeover sights of US rival Pfizer.