Pfizer intends to sell off its stake when the de-merger occurs and seek the most profitable sale of its share of Haleon to maximize value for company stockholders.
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Next month, GlaxoSmithKline will complete its de-merger, forming two companies, New GSK, a pharma-focused business, and Haleon, a stand-alone consumer health operation. Pfizer, a GSK partner, intends to sell off its stake in the consumer health company when the de-merger occurs.
GSK’s consumer health business has been a joint venture with Pfizer. Prior to the two companies forming a consumer health partnership, GSK had once been a contender to acquire Pfizer’s consumer health business. However, that deal was scuttled in 2018.
Days after spurning Pfizer’s consumer health operations, GSK bolstered its own consumer health business by buying out Novartis’ $13 billion stakes. That same year, GSK and Pfizer opted to work together and combine their consumer health businesses into a joint venture. GSK owned the majority share of the joint venture, holding a 68% stake, while Pfizer maintained a 32% share.
The two pharma-focused companies combined efforts into a business valued at approximately $14 billion in 2020. The combined portfolio that will now be sold under the Haleon name includes household staples such as Advil, Tums, Sensodyne toothpaste, Excedrin and Nicorette gum.
Now, Pfizer intends to sell its 32% stake in the company. In a brief announcement this morning, Pfizer’s sale of its stake will keep with the company’s “transformation into a more focused, global leader in science-based innovative medicines and vaccines.” Pfizer said it will seek the most advantageous sale of its share of Haleon in order to maximize value for company stockholders. The company did not attach a value to its stake at this time.
Haleon will be headquartered in Weybridge in the United Kingdom. The consumer health company is expected to attain a premium listing on the London Stock Exchange and will also apply to list American Depositary Shares on the New York Stock Exchange.
Although Pfizer intends to sell its stake in Haleon after the company formally splits away from GSK, the company will continue to have a connection at the board level. John Young, the former group president and chief business officer of Pfizer and Bryan Supran, senior vice president and deputy general counsel at Pfizer will serve on the Haleon board of directors.
GSK is expected to continue to hold a stake in Haleon. Last year, GSK Chief Executive Officer Emma Walmsley predicted that the GSK pharma business, which has been dubbed New GSK, will achieve approximately $46 billion in annual sales by 2031. Walmsley also predicted consistent growth of more than 10% operating profit over the next five years.
