GSK spin-off Haleon becomes world’s biggest standalone consumer health group

GSK’s consumer health spin-off Haleon became the largest London listing in more than a decade when it started trading today, making the owner of Sensodyne toothpaste and Panadol painkillers the world’s biggest standalone consumer health business.

Haleon shares began trading at 330p, giving the group a market valuation of £30.5bn, the biggest London listing since Glencore’s £37bn IPO in 2011.

The split, which defied an offer from Unilever to buy Haleon for £50bn last year, aims to leave GSK — which has faced pressure from activist investors — free to focus on prescription drugs and vaccines. Shareholders received one Haleon share for each GSK share they own.

Haleon, a joint venture with Pfizer, is the only listed pure-play consumer health group available to investors, though it competes with Strepsils maker Reckitt Benckiser — where consumer health accounted for a third of net revenue in 2021 — and with Johnson & Johnson’s consumer health division, which it plans to spin out next year.

GSK shares were down 18.5 per cent at £13.99, reflecting the reduction in value following the spin-off. The drugs and vaccines group will consolidate its shares following Monday’s trading to bring the price back in line with its pre-demerger level.

The split has been a test for GSK’s Emma Walmsley, chief executive since 2017, who argued it would tackle “perennial underperformance” by leaving the drug company with a stronger balance sheet while setting Haleon free to invest in marketing and new products.

GSK and Pfizer together retain about $15bn of holdings in Haleon, which they intend to sell after a lock-up ends in November.

The spin-off, headed by former Novartis executive Brian McNamara and chaired by former Tesco chief executive Dave Lewis, starts its life with about £10bn of debt, which it intends to reduce over time.