In Hale and Good Health, GSK Announces Haleon

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In June 2021, GlaxoSmithKline Chief Executive Officer Emma Walmsley described her plans to spin out the company’s consumer health division. Today, the UK company announced that the new spinout will be called Haleon. They said it comes from “Hale” for “in good health” and “Leon” for “strength.” 

Haleon is expected to be in place by mid-2022. It is projected to bring in about $46 billion in annual sales by 2031 and generate a consistent growth of more than 10% operating profit over the next five years. Walmsley dubbed the company’s pharma business as the “New GSK” and said the spinoff would “unlock the value” of the consumer healthcare unit. 

“With world-class capabilities across prevention and treatment of disease, New GSK is exceptionally well-positioned to positively impact people’s health and to deliver strong performance and value to shareholders through the decade,” Walmsley said in June 2021. 

The company’s pharma business, the New GSK, will be driven by vaccines and specialty therapeutics. It will focus on four core therapeutic areas: Infectious Diseases, HIV, Oncology and Immunology/Respiratory. New GSK has a pipeline of 20 vaccines and 42 drugs. It will include a General Medicines product group holding all of its primary care brands, including older, established products and its inhaled respiratory portfolio. General Medicines is projected to demonstrate stable sales over the next five years. 

The new Consumer Healthcare business, Haleon, is a joint venture with Pfizer. The combined portfolio will include Advil, Tums, Sensodyne toothpaste, Excedrin and Nicorette gum. It will also include brands such as Voltaren, Panadol and Centrum. In 2020, this portfolio generated annual sales of about $13.9 billion. It also includes the integration of consumer product portfolios from Novartis. 

Brian McNamara, chief executive officer designate of Haleon, said, “Introducing Haleon to the world marks another step in our journey to become a new, standalone company. Our name is grounded in our purpose to deliver better everyday health with humanity and to be a world leader in consumer healthcare. We are on track to launch Haleon in mid-2022 and our business momentum is strong. We look forward to updating investors and analysts more on this at our capital markets event at the end of February.” 

Haleon will be headquartered in Weybridge, UK. It is expected to hit a premium listing on the London Stock Exchange, with American Depositary Receipts (ADRs) listed in the U.S. The new Weybridge campus is expected to open by the end of 2024 along with Haleon’s new corporate headquarters. It will include a center of R&D and innovation, as well as a new state-of-the-art Shopper Science Lab. 

Sir Dave Lewis is the chair designate of Haleon. 

Walmsley stated, “Haleon brings to life years of hard work by many outstanding people to build this new company purely dedicated to everyday health. Haleon has enormous potential to improve health and wellbeing across the world with strong prospects for growth, and through listing will unlock significant value for GSK shareholders.” 

In December 2021, GSK rejected Unilever’s $68 billion bid for the consumer healthcare business. Unilever’s brands include Vaseline, Ben & Jerry’s, Hellmann’s and Knorr. The original offer was for £41.7 billion in cash and £8.3 billion in Unilever shares. It was the third bid by Unilever, but GSK rejected it, staying that it “fundamentally undervalued the Consumer Healthcare business and its future prospects.” 

Other companies that expressed an interest in the consumer healthcare business included Advent, CVC Capital Partners Kohlberg Kravis Roberts & Co., Blackstone Medical Inc., Carlyle Group and Permira. 

Under the demerger, shareholders will receive stock in Haleon coming to at least 80% of the 68% stake that GSK currently owned. Pfizer holds the remaining 32%.