Pfizer to exit GSK consumer health joint venture after London listing

Pfizer will sell down its stake in Haleon, its consumer health joint venture with GlaxoSmithKline, after a London listing planned for July 18.

The US drugmaker has committed to selling its shares in a “disciplined manner” and has formed an “orderly marketing” agreement with GSK to ensure the two sellers do not destabilise stock in the new independent company. There will be a lock-up period of several months.

GSK announced on Wednesday it had submitted the prospectus for Haleon to the UK’s Financial Conduct Authority for approval and that it expected the shares to be admitted to the premium listing segment of the London Stock Exchange on July 18.

The spin-off of the consumer health company — which owns brands including Sensodyne and Panadol — will be the largest London listing for a decade.

GSK turned down a £50bn bid from Unilever for the unit at the end of last year, arguing it undervalued the company. Haleon expects to increase sales by 4 to 6 per cent in the medium term, from almost £10bn a year.

Haleon was created with consumer health assets from GSK, Pfizer and Novartis. It will be led by Brian McNamara, who oversaw the joint venture when it was part of GSK, and the board will be chaired by former Tesco chief executive Sir Dave Lewis.

Figures released on Wednesday showed that Haleon made £1.6bn of pre-tax profits in 2021, lower than the figure of £2.2bn estimated by analysts at Barclays in March. Revenues for the year were £9.5bn.

The UK drugmaker owns a 68 per cent stake in the business, while Pfizer has a 32 per cent stake. Before the demerger, GSK is planning to take a dividend of more than £7bn and Pfizer more than £3bn, leaving Haleon with net debt of £10.3bn, a figure it plans to reduce over time.

After the spin-off, GSK investors will own at least 54.5 per cent of the company, receiving a share in Haleon for each GSK share they own. Funding mechanisms designed to fill the hole in GSK’s pension pot will account for another 7.5 per cent. GSK will own up to 6 per cent, which it will also sell down over time to fund investment in its drug and vaccine pipeline.

The company also announced a consolidation of shares in the remaining pharmaceutical business to ensure comparability before and after the spin-off.

Ahead of the demerger, a general meeting will be held on July 6. GSK is due to announce its second-quarter results on July 27, treating Haleon as a discontinued operation. Haleon will provide a trading update on the same date but will publish its full interim results in September.

Pfizer did not respond to a request for comment.

Additional reporting by Judith Evans