Haleon, a major British consumer healthcare company, revealed plans by its biggest shareholder, Pfizer, to reduce its ownership stake. Through a public offering of 630 million shares, Pfizer aims to bring its ownership down to around 24%. The offering’s price per share will likely be announced around March 19th, following a book-building process. This move aligns with Pfizer’s previously announced strategy of gradually decreasing its stake in Haleon. This measured approach underscores Pfizer’s long-term belief in Haleon’s potential and commitment to its continued success.
The offering, expected to raise about 2.03 billion pounds ($2.55 billion), will provide Haleon with significant financial resources to fuel its growth strategy. After paying fees to underwriters, Haleon will receive all net proceeds, further strengthening its financial position. The sale is due to close on April 27, marking a significant milestone in Haleon’s journey.
Haleon finance chief Tobias Hestler told Reuters that Pfizer’s plan to reduce its stake in the company is not surprising. In July, the London-listed Haleon was carved out as an independent firm and comprises the consumer health assets of British drugmaker GSK and U.S. rival Pfizer.
The company has been focusing on trimming debts, reining in costs, and selling off brands to simplify its business, which also includes the ChapStick lip balm brand. In March, it reported a quarterly adjusted profit margin fall as it faced higher costs due to the COVID-19 pandemic and incremental standalone costs.
In February, Haleon shared its positive outlook, expecting its annual revenue to grow by up to 6%. This projection, coupled with the company’s cost-cutting measures and brand development focus, instills confidence in Haleon’s ability to navigate the current market challenges. Pfizer’s decision to reduce its stake in the company aligns with the industry trend, following similar moves by other pharma companies such as Sanofi and Johnson & Johnson.
In a separate deal, Haleon announced Monday that it would buy back shares worth about 315 million pounds from Pfizer off-market. HalonIt added that it will pay the same price as the offer price per share for the off-market repurchases. Halon makes household brands such as Centrum vitamins, Aquafresh mouthwash, and over-the-counter medicines such as Advil painkillers. It was spun out of GSK in July 2022 and is listed on the FTSE 100 index. Shares in the company closed 1.9% lower on Monday. The broader FTSE 100 was flat. The stock has gained 8% this year, outperforming the market. Amid a global slowdown in demand for generic drugs, the industry has been consolidating as large drugmakers spin off their consumer and consumer healthcare divisions.
