British pharma giant GlaxoSmithKline on Monday demerged its newly named consumer healthcare unit Haleon in what will result in London’s biggest IPO in more than a decade.
The new company, which owns brands including Sensodyne toothpaste, pain reliever Panadol and cold reliever Theraflu, is valued at around £40 billion ($47.4 billion) when trading begins on the London Stock Exchange, according to Bloomberg.
GSK CEO Emma Walmsley’s major shift in strategy comes after she faced intense pressure from activists and shareholders over the company’s delays in manufacturing Covid vaccines and treatments.
– ‘London Landmark Entry –
“This will be the largest London listing in a decade, with the new company becoming a big beast with a new skin in the consumer goods world,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
It is expected to be the capital’s largest IPO since Swiss mining giant Glencore was valued at £38 billion when it went public in 2011.
GSK, which owns 68 percent of Haleon, plans to retain 6 percent of the group after the spin-off.
The US pharmaceutical giant Pfizer has announced that it will sell its 32 percent minority stake.
Walmsley, who led consumer operations before being promoted to head of GSK in 2017, has described the split as the group’s most significant corporate change in 20 years.
The split will see GSK split “a significant amount of its sizeable debt pile into Haleon, which is expected to be around £10 billion,” Streeter said.
Haleon could be included in London’s top-rated FTSE 100 depending on its market valuation.
Walmsley, part of a group of fewer than 10 female CEOs who run companies in the Benchmark Index, sees greater long-term value in the demerger than in a sale.
GSK turned down a £50billion bid from consumer goods giant Unilever for the unit earlier this year.
– vaccination boost –
Alongside the demerger, GSK is continuing to expand into the vaccines space after acquiring US biopharmaceutical company Affinivax for up to $3.3 billion in May.
Also that year, the British company invested $1.9 billion in the US group Sierra Oncology, a specialist in drugs to treat rare types of cancer.
Interactive Investor analyst Keith Bowman said the split aims to give GSK “increased management focus on each business.”
This is “particularly the case for its pharma business, which has outperformed rivals like (Covid vaccine maker) AstraZeneca in recent years,” he told AFP.
GSK is set to receive £7 billion in dividends on the split.
The Consumer Healthcare division, whose product portfolio also includes Centrum Multivitamins and anti-inflammatory Voltaren, has annual sales of around £10 billion.
Haleon will be headquartered in Weybridge, south west of London.
“The idea is that a more focused consumer business will help drive sales,” Streeter said.
“There will be no change at the top … which is a vote of confidence in Brian McNamara, a former Procter & Gamble executive who ran the division for eight years.”
#Spinoff #GSK #create #consumer #healthcare #giant
