Haleon takes full control of China JV with $0.2 billion deal

In a strategic move to solidify its presence in the Chinese market, Haleon plc announced today that it has reached an agreement to acquire the remaining 12% stake in its over-the-counter (OTC) joint venture in China, making it a wholly-owned subsidiary. The acquisition of the stake in Tianjin TSKF Pharmaceutical (TADAWUL:2070) Co., Ltd. (TSKF) from Tianjin Pharmaceutical Da Ren Tang Group Corporation Limited (DRTG) is valued at approximately 1.623 billion Renminbi, which equates to around 0.2 billion pounds. According to InvestingPro data, Haleon currently maintains a robust market capitalization of $45.12 billion, making this acquisition relatively modest compared to its overall scale.

This transaction follows Haleon’s purchase of a 33% equity interest in TSKF in December 2024 and is expected to be financed through a combination of Haleon’s existing cash reserves and new third-party debt denominated in Renminbi. The closure of the deal is contingent upon the fulfillment of standard conditions, including the approval of DRTG’s shareholders and necessary regulatory consents, with expectations to finalize within the next three months. The company’s strong financial health, rated as "GREAT" by InvestingPro, suggests it’s well-positioned to handle this additional debt.

Haleon, listed on the London Stock Exchange (LON:LSEG) and New York Stock Exchange under the ticker HLN, is recognized as a global leader in consumer health. The company’s portfolio includes well-known brands such as Advil, Sensodyne, and Centrum, focusing on areas like Oral Health, Pain Relief, and Vitamins, Minerals, and Supplements (VMS).

TSKF, established in 1984, has been a joint venture with TPG and DRTG in China and is known for manufacturing and distributing products under Haleon’s brands, including Fenbid and Voltaren. DRTG, listed on both the Shanghai Stock Exchange and the Singapore Stock Exchange, specializes in the production and distribution of pharmaceuticals within China.

The completion of this acquisition marks a significant milestone for Haleon, as it will provide the company with greater operational control and a more streamlined approach to capitalizing on growth opportunities in the Chinese consumer health market. The company’s impressive gross profit margin of 63.23% and year-to-date stock performance of +5.97% reflect its operational efficiency. Based on InvestingPro’s Fair Value analysis, the stock currently appears fairly valued. For deeper insights into Haleon’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers, along with additional ProTips and detailed metrics.

In other recent news, Haleon plc has announced a significant share buyback program worth up to £330 million, aiming to enhance shareholder value and positively impact earnings per share. This initiative follows the completion of an off-market share purchase from Pfizer Inc. (NYSE:PFE) and will be executed by Goldman Sachs International on the London Stock Exchange. Additionally, Moody’s Ratings has upgraded Haleon’s long-term issuer rating to A3 from Baa1, reflecting the company’s strong operating performance and stable cash generation. Moody’s anticipates that Haleon’s leverage will decrease over the next 12-18 months, driven by EBITDA growth and debt repayments.

The company’s financial stability is further supported by its adequate liquidity profile, with significant cash reserves and access to revolving credit facilities. Moreover, Haleon has updated its share count and voting rights, reporting 9,034,076,586 ordinary shares carrying voting rights as of March 31, 2025. This update ensures compliance with regulatory requirements and provides transparency for stakeholders.

Haleon has also scheduled its Annual General Meeting (AGM) for late May 2025, which will be held virtually to maintain transparency and shareholder engagement. In recent developments, two top executives, Adrian Morris and Tamara Rogers, have acquired shares under the company’s Share Reward Plan, aligning their interests with those of shareholders. These actions demonstrate Haleon’s ongoing commitment to corporate governance and investor relations.

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