26th Jun 2024 13:04
(Alliance News) - Haleon PLC on Wednesday said it has agreed to sell its nicotine replacement therapy business outside of the US to Dr Reddy's Laboratories SA.
Haleon is a Surrey, England-based consumer healthcare arm, spun out of GSK PLC. Dr Reddy's Laboratories SA is a wholly owned subsidiary of Dr Reddy's Laboratories LTD.
"Haleon's NRT business outside of the US is a leader in its category, with a strong portfolio of international and local brands including Nicotinell, Nicabate, Habitrol and Thrive.
"With a long standing heritage, the brands have built a strong reputation for delivering consumers with a variety of nicotine replacement solutions and supporting public health internationally," the company noted.
Haleon will be selling the unit to Dr Reddy's for GBP500 million. This is structured as an upfront cash payment of GBP458 million, with a further up to GBP42 million deferred performance-based consideration payable during 2025 and the first half of 2026.
"This divestment will allow Haleon to exit the NRT category outside of the US and will reduce complexity across the business allowing increased focus on strategic growth areas," Haleon said.
In 2023, the NRT business generated GBP217 million in revenue.
Assuming completion of the transaction in early in the final quarter of the year, Haleon said the sale is expected to dilute 2024 net revenue and adjusted operating profit by about 0.5% and 1% respectively.
Haleon Chief Executive Officer Brian McNamara commented: "The divestment of Haleon's NRT business outside of the US 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.
"Whilst this business has great brands, these are not core for us, but I'm sure they will continue to flourish given the focus and capability of Dr Reddy's."
Haleon shares were down marginally at 332.36 pence in London on Tuesday afternoon.
By Sophie Rose, Alliance News senior reporter
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