Pharmaceutical giants GlaxoSmithKline and Pfizer on Wednesday announced a merger of their consumer healthcare units that produce over-the-counter medicines.

GSK said it would have a 68-percent controlling equity interest in the joint venture that will have combined sales of about 12.7 billion U.S. dollars.

The deal paves the way for British group GSK to have two UK-listed companies, one specialized in the development of drugs and the other in consumer healthcare.

It comes as the pharmaceutical industry's biggest players seek out new blockbuster treatments following expiry of patents for some of their major drugs that has enabled smaller rivals to offer cheaper alternatives.

"Within three years of the closing of the transaction, GSK intends to separate the joint venture via a demerger of its equity interest and a listing of GSK Consumer Healthcare on the UK equity market," a statement said.

"Over this period, GSK will substantially complete the integration and expects to make continued progress in strengthening its Pharmaceuticals business and R&D pipeline."

In a separate statement, US giant Pfizer said the joint venture "will be a category leader in pain relief, respiratory, vitamin and mineral supplements, digestive health, skin health and therapeutic oral health and will be the largest global consumer healthcare business."

GSK chief executive Emma Walmsley said, "The transaction also presents a clear pathway forward for GSK to create a new global Pharmaceuticals/Vaccines company... focused on science related to the immune system, use of genetics and advanced technologies."

She added: "Ultimately, our goal is to create two exceptional, UK-based global companies, with appropriate capital structures, that are each well positioned to deliver improving returns to shareholders and significant benefits to patients and consumers."

It is meanwhile a final act for Pfizer CEO Ian Read, who leaves his post at the end of the year, handing the reins over to the company's chief operating officer Albert Bourla.

"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," Read said.

"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," he added.