(Adds Pfizer's statement, more details)
March 21 (Reuters) - British consumer goods maker Reckitt Benckiser Group said on Wednesday it had ended discussions with Pfizer Inc over buying its consumer healthcare business, a day before the U.S. drug company was expecting binding offers for the unit.
Reckitt's exit from the sale process strengthens the hand of British pharmaceutical company GlaxoSmithKline Plc, which sources familiar with the matter said was working on an offer for the business. It is possible that Pfizer will receive more offers by Thursday's deadline for bids, the sources added.
"An acquisition for the whole Pfizer consumer health business did not fit our acquisition criteria and an acquisition of part of the business was not possible," Reckitt said.
Reckitt's priority would remain organic growth and integration of Mead Johnson Nutrition, the British company said in a statement.
"Pfizer continues to evaluate potential strategic alternatives for the consumer healthcare business, which include a spin-off, sale or other transaction, and Pfizer ultimately retaining the business. We have not yet made a decision, but continue to expect to make one in 2018," Pfizer said in a statement.
A deal could be a game-changer for GlaxoSmithKline, making it one of the biggest global players in consumer health, an increasingly lucrative sector as aging populations and health-conscious consumers drive demand for self-medication.
Pfizer has been hoping to fetch as much as $20 billion for its consumer health business, which includes well known over-the-counter brands such as the Advil painkiller, Centrum multivitamins and Chapstick lip balm, according to the sources.
Although consumer remedies sold over the counter have lower margins than prescription drugs, they are typically very well known and durable brands with loyal customers.
GSK has struggled with a scarcity of promising new drugs in its pipeline at a time of mounting competition in its core respiratory and HIV divisions. (Reporting by Greg Roumeliotis and Carl O'Donnell in New York; additional reporting by Martinne Geller and Hirschler in London and Manas Mishra and Rama Venkat Raman in Bengaluru; Editing by Tom Brown)