Dr. Reddy’s shares gain up to 3% after inking agreement to acquire Haleon’s healthcare brands

Shares of Dr. Reddy’s Laboratories will be in focus in Thursday’s trade (June 27) as the company after market hours on the previous day announced the acquisition of Nicotinell portfolio of Haleon by its subsidiary company-  Dr. Reddy’s Laboratories SA, Switzerland.

In the previous day’s trade, shares of the largecap pharma major ended lower with a marginal cut at Rs 6,068.45 apiece on the BSE.

“We wish to inform that the wholly-owned subsidiary of the Company, namely, Dr. Reddy’s Laboratories SA, Switzerland has entered into a definitive agreement with Haleon plc and its associate companies (“Haleon Group”) to acquire Nicotinell® and related brands by way of acquisition of all of the quotas of Northstar Switzerland SARL (“Northstar Switzerland”) incorporated in Switzerland having registration no. CHE-221.039.836 owned by the Haleon Group with step-down subsidiaries in the United Kingdom and Sweden,” said the company’s exchange filing.

Consequently, the said companies will be step-down wholly owned subsidiaries of the company.

The total revenue of the portfolio being acquired had net revenues of approximately GBP 217 million in CY 2023. 

Dr. Reddy’s apart from growing its core business of generic pharmaceuticals has been investing in the areas of access to novel molecules, consumer healthcare and digital therapeutics as additional levers for business growth. NRT or Nicotine Replacement Therapy is recommended by the ‘World Health Organization Model List of Essential Medicines’ for nicotine use disorders. 

The acquisition will enable Dr. Reddy’s to gain access to a global OTC anchor brand and is seen as a potential vehicle to build the company’s global consumer healthcare OTC business. 

The said transaction is expected to close by early Q4 of calendar year 2024. Against the deal, Dr. Reddy’s Laboratories SA will pay an upfront cash consideration of GBP 458 million and additional performance-based contingent cash payments of up to GBP 42 million in CY 2025 and CY 2026.