Haleon plc:
Haleon to divest
nicotine replacement therapy business outside of the US to Dr.
Reddy's
26
June 2024: Haleon plc ("Haleon")
(LSE/NYSE: HLN) announces that it has entered into an agreement to
sell its nicotine replacement therapy ("NRT") business outside of
the US to Dr. Reddy's Laboratories SA, a wholly owned subsidiary of
Dr. Reddy's Laboratories Limited (along with its subsidiaries
together referred to as "Dr. Reddy's") for total consideration of
£500 million (with additional proceeds from the transfer of
inventory). This portfolio consists of brands including Nicotinell,
Nicabate, Habitrol and Thrive available in gum, lozenge and patch
forms across over 30 markets.
The consideration of £500 million is
structured as an upfront cash payment of £458 million, with a
further up to £42 million deferred performance-based consideration
payable during 2025 and H1 2026. The proceeds from the transfer of
inventory will be received within the same timeframe. Use of the
net cash proceeds will be determined in line with capital
allocation priorities, including reducing leverage. The transaction
is subject to customary regulatory approvals and completion is
expected in early Q4 2024.
This divestment will allow Haleon to
exit the NRT category outside of the US and will reduce complexity
across the business allowing increased focus on strategic growth
areas.
The financial results of the NRT
business represented net revenue of £217 million for the financial
year ended 31 December 2023. Assuming completion of the transaction
in early Q4 2024, this divestment is expected to dilute FY 2024 net
revenue and adjusted operating profit by c. 0.5% and c. 1%
respectively. All other FY 2024 guidance as shared in the Q1
Trading Statement on 1 May 2024 is unchanged.
Brian McNamara, Chief Executive Officer of Haleon
commented: "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. 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."
Notes
For the purposes of UK Listing Rule
10.4: (i) for the financial year ended 31 December 2023, Haleon's
net revenue attributable to the NRT business outside of the US was
£217 million and the profit (as defined in the UK Listing Rules)
was £110 million, which for this purpose excludes directly
allocated and central costs including: dedicated sales,
distribution and marketing, supply chain management, finance
operations, and other administrative central functions; and (ii) as
at 31 December 2023, the NRT business outside of the US had gross
assets of approximately £413 million, including estimated inventory
of £20 million.
Further information
The person responsible for arranging
the release of this announcement on behalf of Haleon is Amanda
Mellor, Group Company Secretary.
About Haleon's Nicotine Replacement Therapy (NRT) portfolio
outside of the US
Haleon's NRT
business outside of the US is a leader in its category, with a
strong portfolio of international and local brands including
Nicotinell, Nicabate, Habitrol and Thrive. With a long standing
heritage, the brands have built a strong reputation for delivering
consumers with a variety of nicotine replacement solutions and
supporting public health internationally.
About Haleon
Haleon (LSE / NYSE: HLN) is a global
leader in consumer health, with a purpose to deliver better
everyday health with humanity. Haleon's product portfolio spans
five major categories - Oral Health, Pain Relief, Respiratory
Health, Digestive Health and Other, and Vitamins, Minerals and
Supplements (VMS). Its long-standing brands - such as Advil,
Sensodyne, Panadol, Voltaren, Theraflu, Otrivin, Polident,
parodontax and Centrum - are built on trusted science, innovation
and deep human understanding.
For more information, please
visit www.haleon.com.