Haleon Sells Non-US Nicotine Replacement Therapy Business to Dr. Reddy's for $633 Million

Haleon, the British consumer health giant, is scaling down, while India's Dr. Reddy's Laboratories is bolstering its over-the-counter product line. The two companies have struck a mutually beneficial deal.

Haleon transfers its nicotine replacement therapy (NRT) business outside the United StatesNRT) Business was sold to Dr. Reddy's for £500 million (approximately $633 million).Last year, the business achieved sales of £217 million (approximately $274 million), primarily driven by products under the Nicotinell brand, which mainly consist of lozenges designed to help reduce nicotine cravings. In Europe, Nicotinell brand products rank among the top 15 best-selling over-the-counter medications. Globally, Nicotinell is the second highest selling NRT brand.

The deal includes an upfront payment of £458 million ($579 million), with completion expected in the fourth quarter. Five months ago, Sky News reported on the negotiations between the two companies and noted that Dr. Reddy's was the leading contender to acquire the business.

Haleon's CEO Brian McNamara said in a statement that the deal aligns with the company's strategy to become more agile and competitive. He added that while the business boasts strong brands, these brands are not at the core of the company, but he believes they will continue to grow under Dr. Reddy's focus and capabilities.

Haleon, a consumer health company formed by the merger of Pfizer and GSK's over-the-counter businesses, was spun off from GSK in 2022. Since then, the London-based company has been reshaping its portfolio. In January this year, Haleon sold its ChapStick brand to Suave Brands Company for $430 million. Haleon’s top products include Sensodyne toothpaste, Centrum multivitamins, and Tums antacids.

Dr. Reddy's, in addition to its core businesses in generics, active pharmaceutical ingredients, and biosimilars, also regards consumer healthcare as a growth driver. Two months ago, the Hyderabad-based company announced a joint venture with Nestlé to integrate several nutritional brands.

Dr. Reddy's CEO Erez Israeli said in a statement that consumer healthcare is a growth and sustainable business with favorable long-term trends. He noted that the business acquired from Haleon has maintained stable sales and strong profitability over the years, and expressed confidence that the company can unlock more value, further expand its product portfolio, and increase global consumer access to these global brands.