GSK bids $940 million to hike stake in Indian unit

MUMBAI - Agence France-Presse

Britain’s GlaxoSmithKline announced yesterday a $940-million bid to sharply increase its stake in its Indian consumer products unit, sending shares of the local company to a record high.

GlaxoSmithKline’s offer for an additional 31.8 percent of GSK Consumer Healthcare is part of a push by Britain’s biggest drugmaker to enlarge its presence in developing markets in the face of tough conditions in Europe. GlaxoSmithKline said in a statement it was offering 52.2 billion rupees ($940 million) to raise its holding in GSK Consumer Healthcare which is involved in research as well as the manufacturing of nutritional products like Horlicks.

GlaxoSmithKline’s plans for the open offer pushed the Indian unit’s stock up by 20 percent to a high of 3,651.8 rupees on the Bombay Stock Exchange.

The company -- which already owns 43.2 percent of GSK Consumer Healthcare -- said it was offering 3,900 rupees ($70) per share, to raise its stake in the Indian unit to 75 percent. The offer represents close to a 30 percent premium to last Friday’s closing price of GSK Consumer Healthcare, which also distributes over-the-counter healthcare products such as Crocin and Sensodyne.

GlaxoSmithKline reported in October that third-quarter net profit fell 18.5 percent from a year earlier to $1.80 billion, hit by weak conditions in Europe.

The British company said then that it was increasing its sales exposures to “growth businesses, notably emerging markets.”