GSK spends $1.05 bn to raise stake in Indian arm
11 March 2014
GlaxoSmithKline Plc (GSK) yesterday said that it has paid £625 million ($1.05 billion) to increase its stake in its Indian subsidiary GSK Pharmaceuticals to 75 per cent, as the British pharmaceutical giant bets on future growth prospects of its business in India.
The London-based company had in December 2013 offered to buy 20,609,774 shares, representing 24.33 per cent of the total outstanding shares of GSK Pharmaceuticals for Rs3,100 per share. (See: Glaxo announces open offer to hike stake in Indian arm) The final payment for shares tendered and accepted will be completed on or before 20 March 2014, GSK said in a statement.
David Redfern, chief strategy officer at GSK said, ''We are very pleased with the outcome of this transaction, which further increases our exposure to a strategically important market. It is a significant vote of confidence in the future growth prospects of our Pharmaceuticals business in India and underlines GSK's long-standing commitment to the country.''
GSK, Britain's biggest drugmaker, had earmarked around $1 billion to raise its stake, betting on rising demand in emerging markets as sales in developed economies slow due to a wave of patent expirations.
Emerging markets such as India and Brazil are an important plank of GSK chief executive officer Andrew Witty's growth strategy, as he grapples with slower uptake of the company's products in the developed world.
In February2013, GSK hiked its stake in its publicly listed Indian consumer healthcare subsidiary, GlaxoSmithKline Consumer Healthcare Ltd, to 72.5 per cent from 43.2 per cent for $901 million.
As per Indian regulations, promoters of listed companies can hold a maximum 75 per cent stake. If the promoter's shareholding rises beyond 75 per cent, the company has to be de-listed from the bourse.
GSK Pharmaceuticals makes drugs for applications including respiratory, cardiovascular, oncology, anti-infective and dermatologic diseases.