GSK unveils expansion plans in India, Nigeria

British drugmaker GlaxoSmithKline said it intends to increase its holdings in its Indian and Nigerian divisions, as part of a long-term strategy to expand into emerging markets, in a statement on Monday.

GSK said it had offered to buy an additional stake of up to 31.8 percent of its Indian unit, GlaxoSmithKline Consumer Healthcare Ltd, in a bid pitched at 3,900 rupees per share.

The proposed voluntary open offer, which would lift its holding from 43.2 percent to up to 75 percent, is worth about £591 million ($941 million, 730 million euros) or 52.2 billion rupees, funded through existing cash resources.

"GSK Consumer Healthcare is a well established business in India and its leading product, Horlicks, is an iconic household brand," the group's chief strategy officer David Redfern said in a statement.

"This transaction represents a further step in GSK's strategy to invest in the world's fastest growing markets and, we believe, offers a liquidity opportunity at an attractive premium for existing shareholders."

In a separate statement, London-listed GSK said it has also reached a deal in principle to ramp up its stake in GlaxoSmithKline Consumer Nigeria PLC from 46.4 percent to 80 percent, in a proposed transaction worth some £62 million.

Redfern added: "This proposal to increase GSK's ownership of GlaxoSmithKline Consumer Nigeria reiterates our long term support of the company's strategy and our confidence in the continuing growth prospects of the business."

In morning deals, GSK's share price dipped 0.71 percent to 1,337.50 pence on London's FTSE 100 index of top companies, which was 0.44 percent lower at 5,793.25 points.

Keith Bowman, equities analyst at brokerage Hargreaves Landsdown, said the move was part of GSK's wider strategy.

"The emerging markets continue to form an important growth driver for GSK," Bowman told AFP.

"Today's moves appear to underline management's confidence in expected long term growth for both locations."

add to favorites email to friend print save as pdf

Related Stories

GlaxoSmithKline says net profits drop 13% in Q1

Apr 25, 2012

British drugsmaker GlaxoSmithKline said Wednesday that its net profits dropped 13 percent to £1.325 billion (1.616 billion euros, $2.134 billion) in the first quarter from a year earlier.

GlaxoSmithKline says Q3 net profits drop 18.5%

Nov 01, 2012

British drugmaker GlaxoSmithKline said Wednesday that third-quarter net profits fell 18.5 percent from a year earlier to £1.12 billion ($1.80 billion, 1.39 billion euros), hit by weak conditions in Europe.

Recommended for you

British Lords hold ten-hour debate on assisted dying

Jul 19, 2014

Members of Britain's unelected House of Lords spent almost ten hours on Friday discussing whether to legalise assisted dying, in an often emotional debate putting the question back on the agenda, if not on the statute books.

AbbVie, Shire agree on $55B combination

Jul 18, 2014

The drugmaker AbbVie has reached a deal worth roughly $55 billion to combine with British counterpart Shire and become the latest U.S. company to seek an overseas haven from tax rates back home.

Safety problems at US germ labs acknowledged

Jul 16, 2014

(AP)—The director of the U.S. Centers for Disease Control and Prevention acknowledged Wednesday that systemic safety problems have for years plagued federal public health laboratories that handle dangerous ...

User comments