GlaxoSmithKline to Invest $1Billion In Nigerian, Indian Businesses


AFRICANGLOBE – Britian’s largest drugmaker, GlaxoSmithKline Plc (GSK) has disclosed plans to invest $1 billion in its Nigerian and Indian units, in a bid to reduce reliance on pharmaceutical products and western markets and increase shares in the fast growing emerging markets.

Pharmaceutical giant, GSK said on Monday it will spend $98 million to acquire an additional 33.7 percent share in its GlaxoSmithKline Consumer Nigeria Plc, shooting its total holdings to 80 percent from 46.4 percent, leaving the minimum 20 percent public shareholding required for a company to remain listed on the Nigerian Stock Exchange (NSE).

For the additional shares, the group is proposing a premium of 28 percent at 48 naira (30 cents) per share.

David Redfern, Chief Strategy Officer, GSK said: “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.”

The Nigerian unit of the drug vendor generated a turnover of over 21.5 billion naira ($140 million) in 2011, with consumer healthcare products like Lucozade, Horlicks, among others, accounting for 70 percent of the company’s revenue.

Last year in India, the Horlicks brand, which is one of the most popular health drinks in the region, contributed $432 million in sales to the Indian unit, making up almost three-quarters of total revenues.

“A lot of the current business of Horlicks is in the south and the east of India. So there is still a great opportunity to increase the penetration to the north and the west,” Redfern said in an interview to Reuters.

GSK plans to purchase a 31.8 percent stake in India’s GlaxoSmithKline Consumer Healthcare Ltd for about $940 million by offering a public offer of 28 percent premium at $70.16 per share.

The offer will see the group’s stake in the Indian consumer products unit jump to 75 percent from 43.2 percent.

GSK has said the Indian and Nigerian transactions will be funded through existing cash resources and won’t impact expectations for the group’s long-term share buy-back program.

GlaxoSmithKline plc (GSK) is a British multinational pharmaceutical, biologics, vaccines and consumer healthcare company headquartered in London, United Kingdom. Listed on the London Stock Exchange and the New York bourse, the group is rated as the world’s fourth-largest pharmaceutical company measured by 2009 prescription drug sales (after Pfizer, Novartis, and Sanofi). It was established in 2000 by the merger of Glaxo Wellcome plc and SmithKline Beecham plc.