Pfizer will exit GSK consumer health JV after spinout

by Stephen Riddle

GlaxoSmithKline is due to complete the split from its consumer health decision – now renamed Haleon – next month, with a listing for the new company on the London Stock Exchange set for 18 July.

GSK said it has now filed a prospectus for the submission of Haleon’s ordinary shares to the stock market with the Financial Conduct Authority (FCA), and is awaiting approval for the move. A listing on the New York Stock Exchange will follow shortly, according to the pharma group.

It also confirmed that Pfizer – which holds a 32% stake in the current consumer health joint venture – plans to sell its stake once Haleon becomes independent.

There had been some debate over Pfizer’s plans, as it previously said it would sell its shares in the new company, although GSK had suggested it may remain a shareholder. Now, GSK’s update on the demerger notes that it will exit its ownership interest in a “disciplined manner.”

Haleon will have annual sales of around £10 billion ($13.6 billion) from its consumer health brands, including Sensodyne toothpaste, Voltaren and Panadol painkillers, and Centrum multivitamins.

Prior to the separation, Haleon will make dividend pay-outs to both GSK and Pfizer, amounting to more than £7 billion for GSK, according to the statement.

GSK also said it will monetise some of its holdings in Haleon, with around £1 billion of those proceeds destined to plug a hole in its UK pension scheme.

It has previously faced criticism from activist investor Elliott Management, which had been pushing for an outright sale of the business, arguing that the remaining stake created an overhang for ‘new GSK’, the retained prescription biopharmaceutical business.

GSK rejected a £50 billion Unilever bid for the consumer health business in January, saying it undervalued the unit.

The news comes hard on the heels of GSK’s announcement of a deal to acquire vaccine specialist Affinivax for $3.3 billion, adding a late-stage pneumococcal vaccine candidate to its pipeline.

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