Indian pharma group Dr Reddy’s eyes swoop on Nicotinell

Business

Dr Reddy’s Laboratories, an Indian pharmaceutical group, is in talks to buy Nicotinell, the anti-smoking aid, from its FTSE-100 parent company.

Sky News has learnt that Hyderabad-based Dr Reddy’s has emerged as the frontrunner to acquire the brand from Haleon, the consumer healthcare giant spun out of GlaxoSmithKline two years ago.

Sources described the talks between the two sides as “ongoing” and cautioned that there was no guarantee that a deal would be reached.

It was unclear on Tuesday how much Dr Reddy’s might pay for the Haleon-owned assets, although one market insider said it was unlikely to be as much as the $800m suggested in one media report last July.

If Dr Reddy’s does proceed with a deal, it would mark the latest in a string of acquisitions for the Indian and US-listed company.

Its most recent purchase came earlier this month when it announced that it was buying MenoLabs, a portfolio of women’s health and dietary supplements.

Dr Reddy’s has a market value in New York of about $11.6bn, having been established in 1984.

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In Britain, the company has had a presence since 2002, and includes commercial offices and a research and development centre in Cambridge.

It also operates an active pharmaceutical ingredient manufacturing site in Mirfield, west Yorkshire.

Haleon, which has a market capitalisation of close to £31bn, is chaired by the former Tesco chief executive Sir Dave Lewis.

It remains part-owned by GSK, which has been steadily reducing its stake to just over 7%.

A number of private equity firms, including Inflexion, had also explored offers for Nicotinell, although it was unclear which other suitors remained in contention should the Dr Reddy’s deal fall through.

Haleon owns some of the most recognisable over-the-counter healthcare brands in Britain, including the multivitamin supplement Centrum, Panadol pain relief tablets and Sensodyne toothpaste.

Nicotinell, which is sold in patch, gum and lozenge form, is said to be the second-largest nicotine replacement therapy product globally.

Its prospective sale comes as Rishi Sunak’s administration prepares to phase out the sale of cigarettes.

Haleon declined to comment, while Dr Reddy’s has been contacted for comment.

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