Dr. Reddy's Expands Global Reach with Haleon's $633M Nicotine Unit Acquisition

With Haleon, the U.K. consumer health giant, focusing on streamlining its operations, and Dr. Reddy’s Laboratories from India expanding its over-the-counter product line, the two companies have struck a deal that aligns well with their strategic goals. Haleon has opted to divest further, recently selling its nicotine replacement therapy (NRT) business outside the United States to Dr. Reddy’s for 500 million pounds ($633 million).

The division, which achieved sales totaling 217 million pounds ($274 million) last year, is driven by the Nicotinell brand, primarily known for its lozenges that assist in reducing nicotine cravings. In Europe, it ranks among the top 15 over-the-counter products, according to Dr. Reddy’s. Globally, Nicotinell holds the second position in sales among nicotine replacement therapies.

The transaction, which involves an initial payment of 458 million pounds ($579 million) and is anticipated to be finalized in the fourth quarter, came as no surprise. Discussions between the companies were reported by Sky News five months ago, indicating Dr. Reddy’s as the leading contender to acquire the business.

Brian McNamara, CEO of Haleon said in a press release, “(The deal) is consistent with our strategy as we implement change to become more agile and competitive. Whilst this business has great brands, these are not core for us, but I’m sure they will continue to flourish given the focus and capability of Dr. Reddy’s.”

Erez Israeli, Dr. Reddy’s CEO, said in a statement,“Consumer healthcare is a growing and sustainable business with favorable long-term trends. The business to be acquired from Haleon has maintained steady sales and strong profitability over the years. We believe we can unlock more value, grow the portfolio further, and increase consumer access around the world to these global brands.”