Pfizer plans to exit GSK consumer health unit Haleon after spinoff

Leon Neal/Getty Images News

Pfizer (NYSE:PFE) intends to exit its 32% stake in Haleon, GSK's (NYSE:GSK) consumer healthcare business which is headed for a spinoff in July.

GSK said that following the demerger, Pfizer intends to exit its 32% ownership interest in Haleon in a disciplined manner, as Pfizer aims to focus on science-based innovative medicines and vaccines.

GSK added that the separation of the consumer health unit will be effected by way of a demerger of at least 80% of GSK's 68% stake; listing of Haleon on the London Stock Exchange (LSE), and setting up of a level 2 sponsored American depositary receipt program on the NYSE.

Haleon is expected to be admitted to trading on the Main Market of the LSE on July 18.

GSK added that prior to the demerger, GlaxoSmithKline Consumer Healthcare, the holding company of the consumer healthcare business, will pay dividends to GSK and Pfizer, with GSK expected to receive more than £7B in cash at separation.

The British pharma giant said qualifying GSK stockholders will be entitled to receive one Haleon share for each GSK share held by them and will continue to own their GSK shares.

Following the demerger, share capital of Haleon will consist of: at least 54.5% will be held in total by GSK shareholders; up to 6% will be held by GSK; 32% will be held by Pfizer (which it intends to exit); and 7.5% by certain Scottish limited partnerships (SLPs) set up to provide a funding mechanism pursuant to which GSK will provide additional funding for GSK’s UK Pension Schemes.

In addition to receiving cash to getting cash from the pre-demerger dividends, GSK intends to monetize its holding in Haleon in a disciplined manner and will also have the ability to monetize the 7.5% stake of SLPs, and to retain any proceeds in excess of ~£1.08B.

GSK noted that after completion of the demerger and listing of Haleon, GSK intends to carry out a GSK share consolidation.

The demerger is subject to, among other things, the approvals by GSK shareholders and regulators.