Haleon, the maker of Sensodyne toothpaste, has agreed a £500m deal to sell a major division outside of the US.
The company, which has a dual listing in London and New York, is selling its nicotine replacement therapy arm to Dr. Reddy’s Laboratories.
The portfolio consists of brands including Nicotinell, Nicabate, Habitrol and Thrive available in gum, lozenge and patch forms across over 30 markets.
The deal includes an upfront cash payment of £458m, with a further deferred performance-based consideration of up to £42m payable during 2025 and the first half of 2026.
Haleon said the net cash proceeds from the deal would be “determined in line with capital allocation priorities, including reducing leverage”.
The deal is expected to be completed early in the fourth quarter of 2024, subject to regulatory approvals.
Haleon said the divestment will allow it to exit the category outside of the US and will “reduce complexity across the business, allowing increased focus on strategic growth areas”.
The division posted a net revenue of £217m in 2023.
Haleon chief executive Brian McNamara said: “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.”
The deal comes after Haleon announced plans to close its only UK factory which will see the loss of more than 400 jobs.
Haleon, which was spun out of drugs giant GSK in 2022, is to shutter its factory in Maidenhead, Berkshire.
Haleon, which employs nearly 2,000 staff in the UK, will transfer some of the production to its site in Slovakia.
At the start of May, Haleon said its revenue was up in its first quarter as the consumer healthcare firm posted an update in line with expectations.
The firm reported organic revenue growth of three per cent, but flagged a decline in reported revenue, which it largely attributed to a foreign exchange impact of 4.6 per cent.
Its so-called ‘Power Brands’, which constitute Sensodyne and Centrum, among others, were strong performers for the company, with organic revenue growth of 5.2 per cent.
