Haleon plc (LSE/NYSE: HLN), a global leader in consumer health with a market capitalization of $42.5 billion, has completed the acquisition of an additional 33% equity interest in its joint venture in China, Tianjin TSKF Pharmaceutical (TADAWUL:2070) Co. Ltd ("TSKF"), as announced today.
The acquisition from partners Tianjin Pharmaceutical Group ("TPG") and Tianjin Pharmaceutical Da Ren Tang Group Corporation Limited ("DRTG") was for a total consideration of approximately RMB 4.465 billion (circa £0.5 billion).
The transaction, which is expected to be accretive to earnings per share (EPS), follows the approval by DRTG's shareholders at their Extraordinary General Meeting on November 22, 2024. All other necessary clearances have also been obtained. According to InvestingPro data, Haleon maintains impressive gross profit margins of 62.2% and has demonstrated strong market performance with a 17.62% return year-to-date.
Haleon's increased stake in TSKF comes after an agreement reached on September 27, 2024. The deal involves the simultaneous purchase of TPG's entire 20% equity interest and a 13% equity interest from DRTG. Furthermore, Haleon and DRTG have agreed that Haleon has an option to acquire, and DRTG has an option to sell, the remaining 12% shareholding in TSKF.
TSKF, established in 1984, is a leading over-the-counter (OTC) company in China, manufacturing and distributing products under Haleon's brands such as Fenbid, Contac, Bactroban, Voltaren, and Flixonase, targeting major therapeutic areas including Pain Relief, Respiratory Health, and Skin Health.
TPG is a large-scale pharmaceutical group in China, involved in research and development, manufacturing, and commercialization across various sectors, whereas DRTG is a core pharmaceutical manufacturing arm of TPG, focusing on Chinese herbal and western medicines.
This strategic move is part of Haleon's broader effort to enhance its global presence in consumer health, with a portfolio that includes Oral Health, Pain Relief, Respiratory Health, Digestive Health and Other, and Vitamins, Minerals and Supplements (VMS). InvestingPro analysis shows the company maintains a "GOOD" overall financial health score, with notably low price volatility (Beta 0.24).
For deeper insights into Haleon's financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro. The company is known for its trusted brands such as Advil, Sensodyne, Panadol, Voltaren, Theraflu, Otrivin, Polident, parodontax, and Centrum.
The information regarding this transaction is based on a press release statement.
In other recent news, Haleon plc has reported significant earnings and revenue results, including the completion of a £230 million off-market share repurchase from Pfizer Inc. (NYSE:PFE) The company also increased its stake in the Chinese joint venture, Tianjin TSKF Pharmaceutical Co. Ltd, to 88%, and finalized the divestment of its nicotine replacement therapy business to Dr. Reddy's Laboratories SA in a deal worth up to £500 million.
Haleon announced key changes to its board, with David Denton resigning as a Non-Executive Director and Bláthnaid Bergin stepping in as an independent Non-Executive Director. Haleon's Chief Financial Officer, Dawn Allen, vested an award of Haleon Ordinary Shares and sold a portion to cover tax obligations.
She retained a significant number of shares, which are subject to a two-year holding period. Morgan Stanley (NYSE:MS) maintained an Overweight rating on Haleon's stock, despite a minor reduction in EPS estimates for FY25/26, while Goldman Sachs downgraded Haleon's stock from "Buy" to "Neutral." Berenberg initiated coverage with a "Buy" rating. Haleon disclosed that Allen, the newly appointed CFO, has been granted share awards as part of her compensation package.
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