GSK spins off consumer arm after rejecting Unilever bid

GLAXOSMITHKLINE has spun off its £31bn consumer arm in Europe’s biggest listing in a decade.

Sensodyne maker Haleon yesterday joined the London Stock Exchange, as its long-awaited carve-out finally completed. It comes months after Unilever tried to buy the division for £50bn.

Haleon, which also makes Panadol and Centrum, landed a market capitalisation of around £31bn upon listing, making it the world’s largest company focused solely on consumer health.

Brian Mcnamara, Haleon’s chief executive, said a public listing was “absolutely the right move” despite commanding a lower valuation than what was offered by Unilever. “I think it will be a great independent company, it will create tremendous value and that’s really my focus,” he said.

Unilever tried to buy GSK’S consumer arm at the start of the year under plans to kick-start its growth. The proposal was rejected by GSK and widely unpopular with Unilever investors.

At the time of the Unilever approach, executives argued that the lower valuation expected in a listing did not include “very significant synergies or premium that would be required to acquire a business”.

Mr Mcnamara said there were no regrets about choosing the London Stock Exchange, even amid investor unease over the economic outlook.

Mr Mcnamara said: “We are a business that is positioned well to compete in a very uncertain environment. We’ve been on this journey to list this business for three and a half years, I think it’s absolutely the right time for both [the remaining pharmaceutical business] New GSK and for Haleon to do this demerger.”

Shares began trading at 330p and rose as high as 337p before falling to 315.9p. Some volatility had been expected due to the structure of the split, which saw GSK shareholders receive shares in Haleon. Glaxosmithkline spun off its consumer health business in an effort to free up more cash to invest in its pharmaceutical and vaccine businesses. As part of the deal, GSK is receiving £7bn in dividends and has reduced its debt pile.

Shares in GSK slipped around 20pc, reflecting the loss of the bulk of Haleon. GSK retains a 13.5pc stake, which it will be able to start selling down from November. Rival Pfizer owns 32pc of Haleon, which was a joint venture between the two.

The last time a business of this size listed on the LSE was Glencore in 2011, which went public with a valuation of £37bn.