British pharma giant GlaxoSmithKline (GSK  ) has decided to join forces with long-time rival Pfizer (PFE  ), spinning off their consumer health departments into one combined unit.

The move was made primarily to further GSK's pharmaceutical and vaccine departments. Both Pfizer and GSK have accumulated around $12.7 billion in revenue from everyday consumer health products such as ChapStick and Tums. Their combined efforts will undoubtedly amplify the scope for R&D in this area.

"We are pleased to announce this new joint venture for Pfizer Consumer Healthcare, delivering on our commitment to complete the strategic review for this business in 2018," said Ian Read, Chief Executive Officer of Pfizer. "Pfizer and GSK have an excellent track record of creating successful collaborations, and we look forward to working together again to unlock the potential of our combined consumer healthcare businesses."

The merger will result in both companies claiming 7.3% of market share, moving far ahead of smaller rivals whilst strategically keeping each other in check. Moreover, GSK will be able to leverage the deal to form two global consumer healthcare companies based in the UK with the aim of producing vaccines. Pfizer will also now have a more concrete selling avenue for its painkillers and vitamins, which were not selling as efficiently earlier.

"This opportunity is truly a unique one in an all-equity deal to create the world's leading over-the-counter drugs company, a leading consumer health-care company with significant value creation for shareholders," said GSK CEO Emma Walmsley. "But it also allows us to strengthen our number one priority, our pharma pipeline."

GSK will have a 68% equity stake in the joint venture while Pfizer will have a 32% stake. GSK is also therefore gaining a certain scale that it did not have access to before through this merger, along with access to Pfizer's distribution channels. It cal also use Pfizer's human capital, research, and goodwill.

"The transaction is a testament to the success of our Consumer Healthcare business, including its excellent reputation, talented colleagues, high-quality products and market reach," said Chris Slager, President, Pfizer Consumer Healthcare. "The dedication and hard work of the Pfizer Consumer Healthcare team is impressive and inspiring. I am proud of our colleagues around the world who are passionate about the success of this business and the important role it plays in empowering consumers to take health and wellness into their own hands."