GSK Announces Spin-off of Consumer Healthcare Business to Form Haleon, a New Global Leader in Everyday Health

Compiled by Fan Dongdong

On February 22, GlaxoSmithKline (GSK) officially announced the spin-off of its consumer health division to establish a new company—Haleon. The new company's name is reportedly a combination of "health" (Hale) and "strength" (Leon).

GSK stated that Haleon is expected to be operational by mid-2022, with anticipated annual sales of approximately $46 billion by 2031, and sustained growth of over 10% in operating profit over the next five years.

Haleon is a joint venture between GSK and Pfizer. The spin-off will also integrate Novartis's consumer product portfolio. GlaxoSmithKline holds a 68% majority stake, while Pfizer holds a 32% stake. The merged company’s product portfolio will include Advil, Tums, Sensodyne toothpaste, Excedrin, Nicorette gum, as well as Voltaren, Panadol, and Centrum brands. In 2020, the annual sales of this product portfolio were approximately $13.9 billion.

In the announcement on GSK's official website, a series of personnel appointments for Haleon, the new company, were also disclosed. For instance, Dave Lewis was appointed as the non-executive chairman of the independent consumer healthcare company, Brian McNamara as the chief executive officer, Tobias Hestler as the chief financial officer, Dana Bolden as the head of global affairs, and Keith Choy as the head of the Asia-Pacific region. Brian McNamara stated that introducing Haleon to the world marks another step in GlaxoSmithKline PLC.'s journey to becoming a new independent company.

Notably, prior to the establishment of Haleon, several companies, including Unilever, had expressed interest in acquiring this business. GSK previously confirmed receiving three "unsolicited, conditional, and non-binding" acquisition proposals from Unilever, with the latest offer being £50 billion (approximately RMB 433.985 billion). Subsequently, GSK issued a statement rejecting all acquisition proposals on the grounds that Unilever had undervalued the business's worth and future prospects. In response, Unilever stated in a declaration that it would not raise its bid beyond £50 billion, and the collaboration between the two parties officially fell through in December of last year.

Haleon's headquarters will be located in Weybridge, UK, with plans to list on the London Stock Exchange. The new Weybridge site is expected to open by the end of 2024 alongside Haleon’s new corporate headquarters, featuring a research and development and innovation center as well as a state-of-the-art scientific laboratory. Walmsley also referred to the company’s pharmaceuticals business as “New GSK,” stating that the demerger will fully “unlock the value of the consumer healthcare division.” In June last year, Walmsley remarked that, with world-class capabilities in disease prevention and treatment, New GSK is poised to make an even greater impact on people’s health and is strongly positioned to deliver robust performance and value for shareholders over the next decade.

In the future, GSK's pharmaceutical business will be primarily driven by vaccines and specialty therapies. The company will focus on four core therapeutic areas, including infectious diseases, HIV, oncology, and immunology/respiratory. GSK has a pipeline of 20 vaccines and 42 medicines, and it also owns a General Medicines portfolio, which includes all primary care brands, older and established products, as well as its inhalation-based respiratory portfolio. The General Medicines portfolio is expected to maintain stable sales over the next five years.

According to the GSK official website, the company will hold a Consumer Healthcare Capital Markets Day event on February 28. The company stated that it will announce detailed information about the spin-off, as well as financial performance and future growth targets, on the day of the event.

Reference Source: In Hale and Good Health, GSK Announces Haleon