Haleon has agreed to sell its ex-US nicotine replacement therapy business to Dr. Reddy’s for a total of £500 million, or about $630 million, the company announced Wednesday.
Under the deal, Haleon will receive £458 million ($578 million) upfront and £42 million ($53 million) payable in 2025 and 2026, depending on how the business performs. Haleon says the move allows it to divest its nicotine replacement therapy business outside of the US and will free up capacity to focus on other areas.
“The divestment of Haleon’s NRT business outside of the US is a further example of Haleon being proactive in managing its portfolio and is consistent with our strategy as we implement change to become more agile and competitive,” Haleon CEO Brian McNamara said in a statement. “Whilst this business has great brands, these are not core for us, but I’m sure they will continue to flourish given the focus and capability of Dr. Reddy’s.”
The portfolio includes Nicotinell, a popular nicotine replacement therapy in Europe, Asia and Latin America, and includes lozenges, patches and gum products in the pipeline. The transaction is expected to be finalized by Q4.
“We have been steadily building our OTC presence in various markets and investing in our capabilities. As a business, consumer healthcare is a growing and sustainable business with favourable long-term trends,” Dr. Reddy’s CEO Erez Israeli said in a statement. “The business to be acquired from Haleon has maintained steady sales and strong profitability over the years.”
GSK last month announced plans to sell off the rest of its share in Haleon after slowly selling off multibillion-dollar pieces of its ownership in the company. Haleon was created in 2019 by merging Pfizer and GSK’s consumer health businesses.