British drugmaker GlaxoSmithKline PLC (GSK) yesterday spun off its consumer health business in the biggest listing in Europe in more than a decade.
The new company, Haleon, becomes the world’s biggest standalone consumer health business, home to brands including Sensodyne toothpaste and Advil painkillers.
Shares in Haleon started trading at ￡3.30 yesterday morning, giving the business a market valuation of about ￡30.5 billion (US$36.4 billion), according to Reuters calculations.
File photo: Reuters
HIGH HOPES
There were high hopes for Haleon’s market valuation after GSK in January said it had rebuffed a ￡50 billion offer from Unilever PLC on the basis it was too low.
Excluding floats carried out via the Shanghai London Stock Connect, Haleon’s listing is the largest on the London Stock Exchange since Glencore listed in May 2011 with a market cap of about ￡37 billion, according to Refinitiv data.
GSK emerges as New GSK, focused solely on vaccines and prescription drugs. The business has been buoyed by recent clinical trial successes, including its potential blockbuster RSV vaccine, and merger and acquisition activity.
There is also the opportunity to use part of the ￡7 billion of financial firepower it would generate through the Haleon spin-off to fund more deals.
DOWNTURN
However, GSK has underperformed relative to its peers in recent years, triggered by a falling share of research and development spending, a series of oncology clinical failures, and missing out on the lucrative market for the first set of COVID-19 vaccines, despite being one of the world’s major vaccine makers.
With the split complete, all GSK shareholders receive one Haleon share for each GSK share they own.
Pfizer Inc would retain its 32 percent stake in Haleon, which it intends on selling off over time. GSK would hold up to 13.5 percent in Haleon, while the remaining 54.5 percent would be owned by GSK shareholders.
After close of trading yesterday, GSK would consolidate its share price, returning it to roughly the same as before the demerger.
That would ensure the company’s earnings per share and share price can be compared with previous periods, it has said.
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