GSK Plc has raised £804 millions ($1 billion) by selling a stake Haleon Plc, its consumer health care division that it spun off last year as a separate firm.
The UK pharma company sold 240 millions shares at 335 pences, a discount of 2.3% to Thursday’s closing price.
The sale represented 2.5% of Haleon’s total shares. It was made via a placement to institutional investors. According to a announcement on Friday, GSK now owns 10.3% of the company that makes Sensodyne tooth paste and Tums digestive products.
This move comes only a few weeks after Pfizer Inc. announced that it was also planning to sell its Haleon stake in the next months. The US drug firm said that the stake in Haleon was no longer considered a strategic asset.
Haleon was initially formed by combining GSK and Pfizer consumer health units.
GSK decided Haleon would be separated so that it could focus more on its pharmaceutics and vaccines businesses. GSK, led by Emma Walmsley as Chief Executive Officer, has faced doubts about its drug pipeline for several years, even though it had recently achieved success with a RSV vaccine, a virus that is common but can be fatal.
GSK stated that since the spinoff it would treat its Haleon stake as a financial asset. The proceeds from the sale of any shares will also be used to improve GSK’s balance sheet, boost its UK pension plan and support its goal to improve its drug portfolio.
Pfizer stated that when Haleon spun off from GSK, it planned to eventually exit as part of its focus on pharma innovation.
Haleon announced a near 35% increase in operating profit during a first quarter update in this month. It had achieved growth in almost all its categories, despite increasing prices across brands by 7.1%.