Pfizer to Sell Stake in Its Consumer Healthcare Joint Venture with GSK

Haleon to list on LSE on July 18

Pfizer Inc. (PFE) announced on June 1 that it plans to sell its 32% ownership interest in Haleon PLC once Haleon begins to trade on the London Stock Exchange (LSE) in July. Haleon is a newly independent company that includes the consumer healthcare businesses of GSK plc (GSK), formerly known as GlaxoSmithKline, and of Pfizer.

Pfizer and GSK entered into a joint venture in July 2019 to combine their consumer healthcare divisions. In the process, Pfizer received a 32% ownership interest in the venture, with the remainder going to GSK.

Key Takeaways

  • Pfizer announced plans to exit its stake in Haleon once the latter is listed on the London Stock Exchange.
  • Haleon is a joint venture that originally included the consumer health businesses of Pfizer, GSK, and Novartis.
  • Pfizer said the plans to sell will be executed in a way to maximize shareholder value and to avoid destabilizing shares of Haleon.

Pfizer to Sell Interest in a "Disciplined Manner"

According to Pfizer, it plans to sell its interest in Haleon following the anticipated listing of the latter later this summer. Pfizer plans to do it in a "disciplined manner" so as to maximize value for Pfizer shareholders. Pfizer has reportedly formed an "orderly marketing" agreement with GSK in an effort to avoid destabilizing the newly-listed shares of Haleon. There will also be a lock-up period lasting several months.

Haleon's spin-off is expected to be the largest London listing in many years and follows a failed bid from Unilever PLC to purchase the unit in 2021. Haleon originally was created by combining the consumer health business assets of Pfizer, GSK, and Novartis AG (NVS). Following the listing, GSK also plans to sell its remaining stake in Haleon, which is estimated at up to 6%.

Impact for Investors

Pfizer says that its plan to exit Haleon is a reflection of its transformation into a company focused on innovative medicines and vaccines. Many of Pfizer's high-profile acquisitions in recent years have been of pharmaceutical and biopharmaceutical companies. Vaccines currently generated nearly $15 billion in quarterly revenue as of Q1 2022, the majority of the company's revenue.

Pfizer's shares slipped in early trading on the day of the announcement. GSK shares are also down, though by smaller margins.

Article Sources
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  1. BusinessWire. "Pfizer Provides Update on Ownership Interest in Haleon."

  2. Financial Times. "Pfizer to exit GSK consumer health joint venture after London listing."

  3. Pfizer Inc. "Pfizer Reports First-Quarter 2022 Results," Page 2.

  4. TradingView. "Price Charts: PFE, NVS, GSK."

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