Pfizer Divests $2.7 Billion Stake in Haleon
Pharmaceutical giant Pfizer has announced plans to divest a stake valued at approximately $2.7 billion in Haleon, the company responsible for producing household names like Sensodyne toothpaste and Advil painkillers.
Market Reaction to Pfizer's Sale
Shares of Haleon experienced a slight decline of 2% during early Monday trading following Pfizzer's revelation of its intention to sell around 630 million shares in the consumer healthcare company.
Impact on Pfizer's Ownership
This strategic move will see Pfizer's ownership in Haleon decrease from 32% to approximately 24%, with the shares valued at approximately $2.7 billion based on Haleon's closing price of $4.42 per share on Friday.
Pfizer's Previous Intentions
Pfizzer had previously disclosed in May of the previous year its plan to gradually reduce its stake in Haleon, prioritizing debt reduction and maximizing returns for shareholders.
Pfizer plans to sell about £2 billion of shares in Haleon, the first step by the UK consumer health company’s biggest shareholder in selling down its 32% stake https://t.co/83Bs9SwtpO
— Bloomberg Asia (@BloombergAsia) March 18, 2024
Source: Twitter/Bloomberg Asia
Formation of Haleon and Recent Developments
Haleon was formed in 2019 through the merger of the consumer healthcare divisions of British pharmaceutical company GSK and Pfizerr, initially operating as a joint venture under GSK's umbrella. Later, in July 2022, Haleon transitioned into an independent entity listed on the London Stock Exchange.
GSK's Divestment
Similarly, GSK has been progressively divesting its interest in Haleon, with its most recent sale in January reducing its ownership to 4.2% from the initial 13% stake it retained.
Haleon's Share Repurchase Plan
In response to Pfizzer's sale, Haleon has announced plans to repurchase shares valued at approximately £315 million from Pfizer in an off-market transaction. Additionally, as a FTSE 100-listed company, Haleon had previously revealed intentions to buy back shares worth £500 million in 2024.
Haleon's Business Strategy
Haleon has been actively implementing strategies to reduce its debt, streamline operations, and divest brands to simplify its business structure.
Recent Deals
In January, Pfizer concluded an agreement to sell its ChapStick lip balm brand to Suave Brands Company for approximately $510 million USD (£400 million), as part of its ongoing divestment strategy.
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Conclusion
Pfizer's decision to divest its stake in Haleon underscores its commitment to strategic realignment and debt reduction, while Haleon continues to pursue its growth objectives through share repurchases and operational enhancements.
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