Dr. Reddy’s Laboratories Ltd said Wednesday it has agreed to acquire British consumer healthcare company Haleon plc’s nicotine replacement therapy business outside the US for 500 million pounds (about $633 million).
The deal to purchase Haleon group company Northstar Switzerland SARL involves an upfront cash payment of 458 million pounds and performance-based contingent payments of up to 42 million pounds, payable in 2025 and 2026, the Indian drugmaker said in a statement.
The portfolio to be acquired consists of the Nicotinell brand of nicotine gum, lozenges and patches in over 30 countries across Europe and Asia, including Japan, and Latin America, as well as local brand names of the product including Nicabate in Australia, Thrive in Canada, and Habitrol in New Zealand and Canada.
Nicotinell is the second-biggest brand globally, excluding the United States in the nicotine replacement category. In 2023, the portfolio generated approximately 217 million pounds in revenue, Dr Reddy’s said.
The closing of the transaction is subject to satisfactory completion of customary conditions, including regulatory approvals. The transaction is expected to close in the early part of October-December 2024.
Erez Israeli, CEO of Dr. Reddy’s, said the company has been steadily building its over-the-counter (OTC) product portfolio in various markets and that consumer healthcare is a growing business with favourable long-term trends.
“We see the acquisition of this global portfolio of consumer healthcare products led by the global brand Nicotinell as a logical extension of our efforts in consumer healthcare OTC in recent years,” Israeli said.
Dr. Reddy’s has acquired several well-known brands in recent years as part of its consumer healthcare OTC business in the US. These include the nicotine replacement brand Habitrol, pain-relief brand Doan’s, women’s health products such as Premama for fertility and parenthood, and the MenoLabs portfolio for menopause.
In India, Dr. Reddy’s has a portfolio of OTC products in the hydration, cough-cold-allergy, and skin care categories. It also recently formed a joint venture with Nestlé India for nutritional health products.
The drugmaker entered the UK consumer health market earlier this year with the launch of the allergy medication Histallay. The acquisition of Nicotinell gives the company a strong footprint in Europe as well as other global markets, complementing and building on its existing global presence and capabilities.
