Glaxo seeks mid-Sept bids for $4 billion Indian Horlicks unit: Report

UK pharmaceutical giant GlaxoSmithKline Plc has requested bids by mid-September for its $4.3 billion Indian consumer-health unit, which owns the popular malted milk brand Horlicks, people with knowledge of the matter said.
Glaxo has sent out an information memorandum with preliminary details about the business to potential suitors, according to the people, who asked not to be identified because the information is private. The sale has attracted interest from potential bidders including Nestle SA, PepsiCo Inc. and Reckitt Benckiser Group Plc, they said.

The UK drugmaker announced in March that it aims to complete a strategic review of Horlicks and other nutritional products by the end of this year. The company is assessing its 72.5 per cent holding in India-listed GlaxoSmithKline Consumer Healthcare Ltd. as part of that process. Proceeds from a potential sale could be used to finance Glaxo’s $13 billion buyout of Novartis AG’s stake in their consumer-health joint venture.
Representatives for Glaxo and Nestle declined to comment. Spokesmen for Reckitt and Pepsi had no immediate comment.
Glaxo’s review of assets includes its 82 per cent stake in the Dhaka-listed GlaxoSmithKline Bangladesh Ltd., as well as marketing rights to some consumer-health brands in other emerging economies including Malaysia, the people said. There’s no certainty the deliberations will lead to a transaction, and the parent company may yet decide to keep the businesses, they said.
Shares of GlaxoSmithKline Consumer Healthcare have advanced almost 10 per cent in Mumbai trading this year, giving it a market value of Rs 299 billion ($4.3 billion).
The Indian division’s brands include Boost, a malt-based drink that’s been endorsed by cricket legend Sachin Tendulkar, as well as Viva, a beverage that contains wheat and barley, and chocolate caramel drink Maltova, the website shows.

GlaxoSmithKline may split up group, spin off consumer division: Report

GlaxoSmithKline Plc is considering a break-up of the group after investors pressed the company's board to spin off its consumer division, the Financial Times reported on Friday.
GSK Chairman Philip Hampton has been in discussions with the group's biggest shareholders about the creation of a standalone pharma and vaccines company in the medium term, the FT reported, citing sources. The move could happen within two or three years, the report said. https://on.ft.com/2mwBuYT

One of the company's top ten shareholders, whom the FT did not name, acknowledged having conversations with the GSK chairman, adding that shareholders "don't quite believe in the company."
Some investors have long called for the group's break-up, arguing that it would crystallise value for component businesses and that there are limited synergies between consumer and pharma.
A GSK spokesman said the group's priority is to improve the performance of its pharmaceutical business, especially research and development. The company is set to outline its new approach for the division next week.
The company's "3 business structure" offers stability to its earnings and helps in free cash flow generation, the spokesman said in a statement.
"But as we have consistently said this is subject to each business continuing to perform competitively and having access to capital. We are pleased to have completed the buyout of the Consumer Healthcare business for which we see very good potential for growth and have set an increased margin target for that business to achieve by 2022," according to the statement.
In April, GSK said it was divesting its rare disease gene therapy drugs to private biotech company Orchard Therapeutics.
Last year, GSK Chief Executive Emma Walmsley had announced a wide-ranging overhaul designed to narrow the focus of drug research and improve returns in the core pharmaceuticals business.