GSK to increase stake in pharmaceuticals subsidiary in India
Aims to raise its holding to 75%
UK drugmaker GlaxoSmithKline has launched a bid to increase its stake in its publicly-listed pharmaceuticals subsidiary in India to increase its exposure to the fast-growing economy.
GSK launched an open offer to buy an extra 24.3% in the unit, GlaxoSmithKline Pharmaceuticals Ltd, with the aim of raising its holding to 75%. The company said it would pay INR 3,100 a share, a 26% premium over the unit's closing share price last Friday (13 December), giving the deal a potential value of approximately INR 64bn or £629m.
'For GSK this transaction will increase exposure to a strategically important market and for our Indian pharmaceuticals subsidiary’s shareholders we believe it offers a good liquidity opportunity at an attractive premium,' said David Redfern, Chief Strategy Officer at GSK.
He added that the announcement is a further demonstration of the GSK's long-term commitment to India. The firm increased its holding in its consumer business earlier this year and more recently committed to a significant manufacturing investment.
The transaction will be funded through GSK’s existing cash resources.
GSK’s Indian pharmaceuticals subsidiary manufactures, distributes and commercialises pharmaceuticals and vaccines across multiple therapeutic areas including respiratory, cardiovascular, oncology, anti-infectives and dermatology. The company employs more than 5,000 people across its operations and generated more than INR 26bn turnover in the financial year ended 31 December 2012.
