Haleon increases stake in China JV to 88% from 55%

Invests about 0.5 bln pounds for additional stake (Il Sole 24 Ore Radiocor) - London , 27 Sep - Haleon, a UK provider of consumer healthcare products, said it has agreed to acquire an additional 33% stake in its Chinese joint venture Tianjin TSKF Pharmaceutical (TSKF) from its partners Tianjin Pharmaceutical Group and Tianjin Pharmaceutical Da Reng Tang Group Corporation (DRTG) for consideration of 4.465 billion renmimbi, or about 0.5 billion pounds.

With the transaction, Haleon will see its holding in the Chinese JV rise to 88% from a current 55%. It also has an option to purchase, and DRTG an option to sell, the remaining 12% stake in TSKF. TSKF accounted for about 40% of Haleon's China revenue in fiscal year 2023 and manufactures and/or distributes brands such as Fenbid, Voltaren and Bactroban.

Haleon said the acquisition is expected to be funded through a combination of existing cash resources and new third-party renminbi-denominated debt.

The deal is subject to customary closing conditions, including the approval of DRTG's shareholders and applicable regulatory clearances, and is expected to close at the end of 2024. The deal is expected to be accretive to EPS, Haleon added.

"China is a key strategic market for Haleon," said Brian McNamara, CEO. "Over the last three years, it has delivered strong market share growth and our acquisition of a further 33% in our JV partnership is an important milestone which is both strategically and commercially compelling. It reflects our commitment to this important market, the exceptional growth potential we see in China and is fully consistent with our capital allocation priorities to drive attractive returns for shareholders and maintain a strong investment grade balance sheet.".

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(RADIOCOR) 27-09-24 15:10:49 (0489) 5 NNNN