GlaxoSmithKline plans to split into two businesses — one for prescription drugs and vaccines, the other for over-the-counter products — after forming a new joint venture with Pfizer's consumer health division.

The revamp is the boldest move yet by GSK Chief Executive Emma Walmsley, who took over last year.

It will lead to the creation of a consumer health giant with a market share of 7.3 percent, well ahead of its nearest rivals Johnson & Johnson, Bayer and Sanofi, all on around 4 percent.

Walmsley has previously played down the idea of breaking up the group, something that a number of investors have called for over the years.

On Wednesday, however, she announced that GSK and Pfizer would combine their consumer health businesses in a joint venture with sales of $12.7 billion, 68 percent-owned by the British company, in an all-equity transaction.

GSK said the deal laid the foundation for the creation of two new U.K.-based global companies focused on pharma/vaccines and consumer healthcare within three years of the transaction closing.

For Pfizer, the deal resolves the issue of what to do with its consumer health division, which includes Advil painkillers and Centrum vitamins, after an abortive attempt to sell it outright earlier this year.

GSK, whose consumer products include Sensodyne toothpaste and Panadol painkillers, had withdrawn from that earlier Pfizer auction process but Walmsley said the opportunity to strike an all-equity deal cleared the way for the new agreement.

"It's something we've been able to do quickly and quietly," she told reporters in a conference call.

"What this deal is all about is the opportunity to strengthen two businesses — a world-leading consumer healthcare business and a new GSK that is focused on pharma and vaccines."

Shareholders welcomed the news and the shares jumped 7 percent, with Jefferies analysts saying the future separation could crystallize value.

Walmsley said there would be an inevitable impact on jobs but there was also an opportunity for cost savings in procurement and across the supply chain.

The consumer tie-up follows a deal by GSK earlier this year to buy Novartis's stake in their consumer joint venture for $13 billion and comes as Walmsley tries to reshape Britain's biggest drugmaker, which has seen its shares move sideways for years.