GlaxoSmithKline to Spend $1 Billion to Lift Stakes in India, Nigeria Units
Published: Nov 27, 2012
GlaxoSmithKline Plc plans to spend more than $1 billion to raise stakes in its Indian and Nigerian consumer healthcare arms, as Britain's biggest drugmaker deepens its emerging markets and non-prescription consumer health footprint. The deals are the latest of several by GSK, which is reducing its reliance on traditional regulated markets in Western economies where sales are slowing. GSK said on Monday it will buy up to an additional 31.8 percent stake in India's GlaxoSmithKline Consumer Healthcare Ltd for about $940 million by paying 3,900 rupees ($70.16) per share in an open offer. The price was a premium of 28 percent to the stock's Friday close. On similar lines, GSK also said it plans to raise the stake in its Nigerian consumer products unit to 80 percent from 46.4 percent now in a $98 million deal. Post the offer, GSK's stake in the Indian consumer products arm, which makes health drinks and over-the-counter drugs and balms, will rise to 75 percent from 43.2 percent. "The offer shows their commitment to India business," said Daljeet Kohli, head of research, at brokerage IndiaNivesh in Mumbai. "Also, having 75 percent control is as good as having full control. You can take any decision or pass any resolution you want," he added.