New GSK To Leave Flagship HQ After Consumer Health Split
Will Depart Landmark HQ
Executive Summary
Company follows US office downsizing with similar plans for its global headquarters, once consumer health spin-out is complete in 2022.
After announcing its departure from its well-known US headquarters in favor of smaller offices in the same regions, GlaxoSmithKline has unveiled similar plans for its global HQ in the UK.
Last week, the company announced it was to leave its campus site in Research Triangle Park, North Carolina for a space barely 10% of the size in the nearby American Tobacco Campus in downtown Durham, with a similar downsizing shift in Philadelphia, from its Navy Yard site to FMC Tower in University City.
Those moves reflect a post-pandemic shift away from large office spaces towards smaller and less costly shared spaces in central locations, and that same logic looks set to be applied to its flagship global headquarters in west London.
The company has been in its landmark steel and glass building since 2002, but now that it is preparing to spin-out its consumer health division next year, it has plans to quit the Brentford site entirely by 2024.
The proposals announced on 11 October form part of GSK’s ongoing work to prepare for its separation into two next year: new GSK, a global pharmaceuticals and vaccines company, and a market-leading consumer healthcare company with annual sales of more than £10bn ($13.6bn).
The consumer healthcare company will relocate to new headquarters in nearby Weybridge, UK, just outside London, moving to a temporary location before a dedicated campus is constructed. The company expects this site to be ready for use by 2024, subject to consultation and planning approvals, and will be home to around 1,400 employees.
Following the split, the pharma and vaccines company, dubbed ‘New GSK’, will also move to a new UK headquarters. The company said it would identify an “appropriate site that meets the needs of the new organization,” with the expectation that a building with a smaller footprint will be chosen.
The company confirmed that the search would be based in the same area as GSK’s current headquarters, giving it access to the UK’s leading science and innovation hubs and transport links.
The company plans to give a further update on its new headquarters in mid-2022, and expects to remain at the company’s current headquarters, at GSK House in Brentford, until at least the end of 2023.
Emma Walmsley
The newly announced plans reflect the CEO Emma Walmsley’s consistent focus on cost-savings and commitment to reinvesting in the business, but also coincides with renewed pressure on GSK’s leadership.
Activist investors Elliott Management launched a campaign earlier this year to force a shake-up of the business ahead of the consumer spin-off, and was recently joined by Bluebell Capital Partners. (Also see "Another Activist Investor Joins Calls For GSK Leadership Review" - Scrip, 24 Sep, 2021.)
Those calls, which include a demand for alternative approaches to the spin-off and a potential formal recruitment process to replace Walmsley, have been repelled, but have tested the firm’s board.
Gordon Singer, head of Elliott’s London office and son of billionaire founder Paul Singer, paid a surprise visit to an investor meeting held by GSK, in which he once again questioned Walmsley’s leadership.
Leading institutional investors continue to back Walmsley’s plan, but will hope for growth above and beyond GSK’s forecasts for the period up to 2031, which depend on expansion in vaccines, HIV and oncology. (Also see "‘New GSK’ Still Has Some Convincing To Do" - Scrip, 24 Jun, 2021.)