Glaxo heats up move towards drinks markets

 
Julian Harris
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BRITAIN’S largest pharma company is hoping to spend over half a billion pounds expanding into consumer markets in India and Nigeria, where it earns significant revenue from the highly popular Horlicks drink.

GlaxoSmithKline (GSK) announced yesterday a £591m offer to boost its stake in its Consumer Healthcare subsidiary in India, along with a £62m bid to buy more shares in its Nigerian consumer wing.

The moves follow chief executive Andrew Witty’s 2010 pledge to steer the company away from traditional “white pill and Western markets”.

GSK warned this year that it continues to be hit by Western governments enforcing price cuts on drugs, and that it will continue to look elsewhere for growth.

“GSK Consumer Healthcare is a well established business in India and its leading product, Horlicks, is an iconic household brand,” said GSK executive David Redfern.

The Nigerian division also specialises in Horlicks, along with Panadol, Sensodyne, and Lucozade.

GSK has reached an agreement in principle to increase its stake in GSK Consumer Nigeria to 80 per cent, the maximum possible while still keeping the division publicly listed.

Meanwhile the voluntary open offer for its Consumer Healthcare subsidiary in India would take its holding up to 75 per cent – again the highest allowed by listing rules.

GSK’s shares close down 1.26 per cent in London at 1,330p.