Haleon to Sell Nicotine-Quitting Aid Business for $634 Million — Update
By David Sachs and Ian Walker
Haleon is selling its nicotine-quitting aid business outside of the U.S. to Dr. Reddy's Laboratories, an India-based pharmaceutical company, for up to 500 million pounds ($634.2 million) as part of a plan to simplify the business and focus on key growth areas.
The consumer-healthcare business--which was spun out of GSK and is partly owned by Pfizer--said Wednesday that the money raised from the sale will be used in line with its capital allocation policy and to reduce debt.
Haleon--which houses Sensodyne toothpaste and Aquafresh mouthwash as well as over-the-counter medicines Panadol and Advil--will receive an upfront payment of GBP458 million from the sale, with the rest payable next year and into the first half of 2026, based on certain performance targets being achieved.
The sale includes nicotine replacement therapies such as patches, lozenges, and gum under brands like Nicotinell, Nicabate, Habitrol, and Thrive.
The sale is expected to complete early in the fourth quarter of this year and will dilute revenue by 0.5% and operating profit by 1%, Haleon said, adding that all other guidance is unchanged.
The business that is being sold generated revenue of GBP217 million in 2023 and represented around 1.9% of the group's figure.
"The divestment of Haleon's NRT business outside of the U.S. is a further example of Haleon being proactive in managing its portfolio and is consistent with our strategy as we implement change to become more agile and competitive," Chief Executive Brian McNamara said.
On May 31, Haleon completed the sale of its ChapStick brand for $430 million.
Haleon was formed in July 2019 from the merger of GSK and Pfizer's consumer-healthcare businesses before being spun off and listed on the London Stock Exchange in July 2022.
GSK sold its last remaining shares in Haleon last month, while Pfizer owns 22.6%.
Haleon shares at 1252 GMT were down 0.70 pence, or 0.2%, at 331.80 pence. However, they are currently up 3.2% over the year to date.
Write to David Sachs at david.sachs@wsj.com and Ian Walker at ian.walker@wsj.com
(END) Dow Jones Newswires
June 26, 2024 09:33 ET (13:33 GMT)
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