India's Dr. Reddy’s signs pact with UK's Haleon plc to acquire its NRT portfolio for Rs 5,275 crore

Hyderabad-based Dr. Reddy’s Laboratories Ltd., a global pharmaceutical company, recently announced a significant acquisition deal with Haleon plc. 

The definitive agreement involves Dr. Reddy’s subsidiary, Dr. Reddy's Laboratories SA, purchasing shares of Northstar Switzerland SARL, a Haleon group company.

The acquisition includes Haleon’s global portfolio of consumer healthcare brands in the Nicotine Replacement Therapy (NRT) category outside of the United States. 

The transaction, valued at GBP 500 million (approximately Rs 5,270 crore), comprises an upfront cash payment of GBP 458 million (approximately Rs 4,828.3 crore) and performance-based contingent payments of up to GBP 42 million (approximately Rs 442.7 crore), payable in 2025 and 2026.

Which brands and markets are involved?

The portfolio Dr. Reddy’s is set to acquire includes Nicotinell, a leading global NRT brand with a presence in over 30 countries across Europe, Asia, including Japan, and Latin America.

Local market-leading brand names of the product include Nicabate in Australia, Thrive in Canada, and Habitrol in New Zealand and Canada.

The acquisition covers all formats, such as lozenge, patch, gum, and pipeline products, in all applicable global markets outside the United States. Nicotinell is the second largest brand globally in the NRT category and holds the top position in 14 of the top 17 global markets. 

The portfolio generated approximately GBP 217 million in revenue in 2023. The acquisition deal is subject to the satisfactory completion of customary conditions, including regulatory approvals. The transaction is expected to close in early Q4 of 2024.

Upon closing, Dr. Reddy’s will acquire the NRT business in all countries outside the United States, with operations transitioning to Dr. Reddy’s in a phased approach to ensure successful integration of the business.

Focused on expanding consumer healthcare

This acquisition aligns with Dr. Reddy’s strategic focus on expanding its consumer healthcare and over-the-counter (OTC) product portfolio.

The Hyderabad-based company has been investing in growth areas such as novel molecules, digital therapeutics, and consumer healthcare.

The addition of Nicotinell and related brands strengthens Dr. Reddy’s presence in the global OTC market, particularly in Europe, and complements its existing OTC products and capabilities.

Erez Israeli, CEO of Dr. Reddy’s, said, “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 and of our purpose of ‘Good Health Can’t-Wait’.”