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REG - Haleon PLC - Haleon to increase stake in China JV to 88%

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RNS Number : 0244G  Haleon PLC  27 September 2024

 

Haleon to increase stake in China JV to 88%

 

27 September 2024: Haleon plc ("Haleon") (LSE/NYSE: HLN) today announces that
it has entered into an agreement to acquire an additional 33%(1) equity
interest in Tianjin TSKF Pharmaceutical Co. Ltd ("TSKF"), its joint venture in
China from its partners, Tianjin Pharmaceutical Group ("TPG") and Tianjin
Pharmaceutical Da Ren Tang Group Corporation Limited ("DRTG") for a total
consideration of RMB 4,465 million (c. £0.5 billion).

 

TSKF accounted for c. 40% of Haleon's China revenues in FY 2023 and
manufactures and/or distributes leading brands such as Fenbid, Voltaren and
Bactroban. This acquisition will increase Haleon's participation in TSKF from
55% to 88% and deliver greater control and increased strategic and operational
flexibility across the business. The acquisition is expected to be funded
through a combination of Haleon's existing cash resources and new third-party
Renminbi-denominated debt. Subject to customary closing conditions, including
the approval of DRTG's shareholders and applicable regulatory clearances, the
transaction is expected to close end of 2024 and to be accretive to EPS.

 

In addition, Haleon and DRTG have agreed, effective from closing of the
acquisition, that Haleon would have an option to acquire and DRTG an option to
sell the remaining 12% shareholding in TSKF.

 

Brian McNamara, Chief Executive Officer of Haleon commented: "China is a key
strategic market for Haleon. Over the last three years, it has delivered
strong market share growth and our acquisition of a further 33% in our JV
partnership is an important milestone which is both strategically and
commercially compelling. It reflects our commitment to this important market,
the exceptional growth potential we see in China and is fully consistent with
our capital allocation priorities to drive attractive returns for shareholders
and maintain a strong investment grade balance sheet."

 

Notes

1.  This transaction consists of a simultaneous and inter-conditional
purchase of the entire 20% equity interest in TSKF held by TPG and a 13%
equity interest in TSKF held by DRTG.

 

 

Amanda Mellor

Company Secretary

 

 

Enquiries

 

 Investors                                    Media

 Sonya Ghobrial          +44 7392 784784      Zoë Bird            +44 7736 746167
 Rakesh Patel            +44 7552 484646      Gemma Thomas        +44 7985 175048
 Emma White              +44 7823 523562

 Email: investor-relations@haleon.com         Email: corporate.media@haleon.com

 

About Haleon

Haleon (LSE/NYSE: HLN) is a global leader in consumer health, with a purpose
to deliver better everyday health with humanity. Haleon's product portfolio
spans five major categories - Oral Health, Pain Relief, Respiratory Health,
Digestive Health and Other, and Vitamins, Minerals and Supplements (VMS). Its
long-standing brands - such as Advil, Sensodyne, Panadol, Voltaren, Theraflu,
Otrivin, Polident, parodontax and Centrum - are built on trusted science,
innovation and deep human understanding.

 

For more information please visit www.haleon.com (http://www.haleon.com)

 

About TSKF

Founded in 1984, TSKF is a joint venture of Haleon, TPG and DRTG in China.
TSKF is a leading OTC company that manufactures and distributes renowned
products under Haleon's brands in China, such as Fenbid, Contac, Bactroban,
Voltaren and Flixonase in major therapeutic areas such as Pain Relief,
Respiratory Health and Skin Health.

 

About TPG

TPG is a large-scale pharmaceutical group based in China. TPG is engaged in
the research and development, manufacturing and commercialisation across four
major business sectors including traditional Chinese medicine, chemical and
biological pharmaceuticals, high-end medical devices, and modern commercial
logistics. The Company is ranked among China's top 500 enterprises.

 

About DRTG

DRTG (SHSE: 600329 / SGX: T14) is the core pharmaceutical manufacturing arm of
TPG. DRTG is engaged in the research, development and manufacturing of Chinese
herbal medicines, proprietary Chinese medicines, western medicine, and other
products primarily in China. The company is also involved in the wholesale and
retail of medicines in China. DRTG was founded in 1981 and listed on the
Singapore Stock Exchange and the Shanghai Stock Exchange.

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