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

What are the chances that your dad isn't your dad?

Apr 16, 2014

How confident are you that the man you call dad is really your biological father? If you believe some of the most commonly-quoted figures, you could be forgiven for not being very confident at all. But how ...

New technology that is revealing the science of chewing

Apr 15, 2014

CSIRO's 3D mastication modelling, demonstrated for the first time in Melbourne today, is starting to provide researchers with new understanding of how to reduce salt, sugar and fat in food products, as well ...

After skin cancer, removable model replaces real ear

Apr 11, 2014

(HealthDay)—During his 10-year struggle with basal cell carcinoma, Henry Fiorentini emerged minus his right ear, and minus the hearing that goes with it. The good news: Today, the 56-year-old IT programmer ...

Italy scraps ban on donor-assisted reproduction

Apr 09, 2014

Italy's Constitutional Court on Wednesday struck down a Catholic Church-backed ban against assisted reproduction with sperm or egg donors that has forced thousands of sterile couples to seek help abroad.

User comments