Haleon to sell nicotine replacement therapy business outside US for $633 million

(Reuters) -Haleon will sell its nicotine replacement therapy business outside the U.S. to a unit of India's Dr. Reddy's for 500 million pounds ($632.55 million), the British consumer healthcare company said on Wednesday.

The divestment is expected to dilute Haleon's 2024 net revenue and adjusted operating profit by about 0.5% and about 1%, respectively. The company kept the rest of the forecast unchanged.

The business, which includes the Nicotinell brand of nicotine gum, lozenges and patches, generated revenue of 217 million pounds last year.

Haleon, the maker of Sensodyne toothpaste, was created by a merger of GSK and Pfizer's consumer healthcare businesses in 2019 and spun off from GSK in 2022.

Earlier this year, Haleon also disposed off its popular ChapStick brand.

The latest divestment, expected to close in the fourth quarter, will allow Haleon to lower debt and focus on its growth areas such as non-prescription drugs, vitamins and oral care products.

Dr. Reddy's, one of India's largest generic drugmakers, draws a significant share of revenue from North America and Europe.

The company, in May, noted that the consumer health sector would be one of its key focus areas for future investments as it looks to diversify its business operations.

Dr. Reddy's said in April it would form a joint venture with Nestle India to make products such as supplements and nutraceuticals.

Haleon's shares were nearly flat in early afternoon trading .

($1 = 0.7905 pounds)

(Reporting by Yadarisa Shabong in Bengaluru and Rishika Sadam, Editing by Saumyadeb Chakrabarty, Sriraj Kalluvila and Shounak Dasgupta)