GSK sold a Haleon stake worth approximately £1 billion on Tuesday evening as part of its plans to divest itself from the FTSE 100 consumer health care company.
The British pharmaceuticals group Haleon has sold another 300 million shares, or about 3.2% of the company.
Bank of America, Citigroup, and other financial institutions handled the placement of shares. The price will be confirmed Wednesday. GSK could raise approximately £1 billion based on Haleon’s closing price at 333 1/2p.
GSK will spin off Haleon in New York, and list it on the London Stock Exchange, starting in July 2022. This is the largest London listing for more than 10 years. The shares started trading at 330p. GSK wanted to be able to concentrate on the rapid revival of its core vaccines and pharmaceuticals.
GSK retained an initial 12.9% stake in Haleon, but sold shares in both May and October to reduce its stake down to 7.4%.
The London-based firm has invested the money raised from Haleon into bolt-on acquisitions. GSK announced last week that it had agreed to a deal with Aiolos Bio of San Francisco, which could be worth up to $1.4 Billion.
Pfizer — GSK’s partner in the joint venture — holds a significant 32 percent stake in Haleon. Haleon has suffered from the shareholdings since its listing.
GSK’s sale coincided with a Tuesday report that an Indian drug company, Dr Reddy’s Laboratories was in discussions to purchase the smoking cessation product Nicotinell. Sky News reports that Dr Reddy’s has the leading position to buy the products. However, the price is likely to be lower than the $800 million reported asking price in the summer.
Haleon, who declined to comment on this latest report, told investors that Nicotinell is the second largest brand in the world. Haleon’s “digestive and other” division includes Nicotinell, which is nicotine gums, patches and lozenges.
Bloomberg reported in July that Haleon had been working with an advisor to identify potential buyers of the brand. It was also said to have drawn interest from both rival consumer companies and investment firms. Nicotinell manufactures nicotine gum, patches, and lozenges
Dr Reddy’s declined to comment. The company is valued at approximately $11.6 billion in the New York Stock Exchange.
Haleon, headquartered in Weybridge (Surrey), employs over 22,000 people around the world. When it spun off from GSK, Haleon became the first publicly listed company focusing solely on consumer health.
Haleon offers a wide range of products, including vitamins, minerals, and supplements, as well as oral, respiratory, and digestive health. Haleon’s brands include Panadol, Voltaren and Centrum multivitamins.
Its chairman, Sir Dave Lewis, is the former Chief Executive of Tesco.
Haleon was reported to have explored a potential divestment for $600 million of its ChapStick brand of lip balm. In July, Haleon sold Lamisil to Karo Healthcare, an antifungal product, for £235 millions.
McNamara refused to comment on the possible sale of Nicotinell in an August interview, saying that he “loves” his portfolio. We have worked hard to reach this point. We can either strengthen the portfolio by divesting or bolt-on acquisitions. We are analyzing where things will go. It’s not an extensive divestment program where we feel we need to clean the portfolio”.