UNITED KINGDOM – GSK’s consumer healthcare unit Haleon, was worth around £31 billion (US$37.3 billion) when it began trading in London Stock Exchange on July 18, well short of the price rival Unilever offered to pay earlier this year.

At the start of the year, GSK rejected a £50-billion (US$60 billion) bid for the unit from consumer goods titan Unilever.

The new company—which owns brands including Sensodyne toothpaste, pain relief drug Panadol and cold treatment Theraflu—was worth lower than an expected £40 billion (US$48 billion), with its shares down five percent.

The demerger overseen by GSK chief executive Emma Walmsley is aimed at allowing the pharmaceuticals group to focus on its core pharmaceuticals business.

Walmsley has faced intense activist shareholder pressure over GSK delays in producing Covid jabs and treatments.

“It’s day one of our new era and our new purpose: we’re now 100% focused on biopharma innovation, uniting science, technology and talent to get ahead of disease together,” GSK wrote on Twitter.

GSK’s share price tumbled 20 percent in early London trading following the demerger.

“For Haleon, there’s no doubt this is an extremely challenging time to come to market, with this year’s equity market volatility,” noted Victoria Scholar, head of investment at Interactive Investor.

“It is also a challenging time for the consumer health sector, given that inflation is close to double digits in the UK and in the US.”

The demerger overseen by GSK chief executive Emma Walmsley is aimed at allowing the pharmaceuticals group to focus on its core pharmaceuticals business.

The consumer healthcare division, whose portfolio of products includes also Centrum multivitamins and anti-inflammatory Voltaren, generates annual sales of about £10 billion (US$12 billion).

With the split complete, all GSK shareholders receive one Haleon share for each GSK share they own.

Pfizer will retain its 32 percent stake in Haleon, which it intends on selling off over time. GSK will hold up to 13.5 percent in Haleon, while the remaining 54.5 percent will be owned by GSK shareholders, according to Reuters.

Walmsley, who had led the consumer unit prior to her promotion as head of GSK in 2017, sees more long-term value in the demerger than a sale.

“GSK shot themselves in the foot by not accepting (the bid),” Michael Hewson, chief market analyst at CMC Markets UK, told AFP.

At the same time, “£30 billion (US$36 billion) is still a pretty decent valuation given the cost-of-living crisis.”

GSK’s future

Walmsley, part of a group of less than 10 women chief executives running companies on London’s top stock market index, the FTSE 100, has described the demerger as the group’s most significant corporate change in two decades.

Alongside the demerger, GSK is expanding further into the field of vaccines. In May it snapped up US biopharmaceutical firm Affinivax for up to US$3.3 billion.

Also, this year, the British company spent US$1.9 billion on US group Sierra Oncology, a specialist in medicines for rare forms of cancer.

Haleon will be headquartered in Weybridge, southwest of London.

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