Glaxo will have a 68 percent controlling stake in the new entity, with combined sales of $12.7 billion and led by Brian McNamara, the CEO of the U.K. company’s Consumer arm.

The transaction creates the world’s biggest supplier of over-the-counter medicines with brands of painkillers such as Advil and Panadol and marks a shift from Glaxo Chief Executive Officer Emma Walmsley’s previously stated strategy of keeping the steadily performing consumer and vaccine businesses under the same roof as the more volatile pharma operations.

The benefits of separating into two companies -- one focused on prescription medicines and the other on consumer health -- outweigh the advantages that come with a more diversified structure, Walmsley told reporters on a conference call.

The transaction will let Glaxo focus on developing drugs for cancer, HIV and other diseases, taking it out of the business of selling low-priced products in the competitively squeezed consumer field.

Walmsley has been working to revitalize a lackluster pipeline of new prescription drugs at Glaxo, culling programs to focus on those that look most likely to succeed and bringing in industry veteran Hal Barron to oversee research.

Earlier this month, Glaxo agreed to buy drugmaker Tesaro Inc. for $5.1 billion, expanding in cancer medicines for a price analysts deemed high.