Business
Divestment of NRT business outside of the US
Divestment of NRT business outside of the US.
About this update from Haleon Plc
[{"type":"text","content":"\n\n\n \nHaleon plc: Haleon to divest nicotine replacement therapy business outside of the US to Dr. Reddy's\n \n26 June 2024: Haleon plc (\"Haleon\") (LSE/NYSE: HLN) announces that it has entered into an agreement to sell its nicotine replacement therapy (\"NRT\") business outside of the US to Dr. Reddy's Laboratories SA, a wholly owned subsidiary of Dr. Reddy's Laboratories Limited (along with its subsidiaries together referred to as \"Dr. Reddy's\") for total consideration of £500 million (with additional proceeds from the transfer of inventory). This portfolio consists of brands including Nicotinell, Nicabate, Habitrol and Thrive available in gum, lozenge and patch forms across over 30 markets.\n \nThe consideration of £500 million is structured as an upfront cash payment of £458 million, with a further up to £42 million deferred performance-based consideration payable during 2025 and H1 2026. The proceeds from the transfer of inventory will be received within the same timeframe. Use of the net cash proceeds will be determined in line with capital allocation priorities, including reducing leverage. The transaction is subject to customary regulatory approvals and completion is expected in early Q4 2024.\n \nThis divestment will allow Haleon to exit the NRT category outside of the US and will reduce complexity across the business allowing increased focus on strategic growth areas.\n \nThe financial results of the NRT business represented net revenue of £217 million for the financial year ended 31 December 2023. Assuming completion of the transaction in early Q4 2024, this divestment is expected to dilute FY 2024 net revenue and adjusted operating profit by c. 0.5% and c. 1% respectively. All other FY 2024 guidance as shared in the Q1 Trading Statement on 1 May 2024 is unchanged.\n \nBrian McNamara, Chief Executive Officer of Haleon commented: \"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.\"\n \nNotes\nFor the pur...