GlaxoSmithKline plc (NYSE:GSK) (LON:GSK) said Wednesday it has agreed to sell 28.2 million shares in Aspen Pharmacare Holdings Ltd for $696.5 million.
Britain’s biggest pharmaceutical company would now be left with 56.5 million shares or 12.4% in the South African company.
GlaxoSmithKline to remain a significant shareholder
In today’s announcement, GlaxoSmithKline plc (NYSE:GSK) (LON:GSK) indicated it intends to sell up to roughly one-third of its 19% stake in Aspen by placing the ordinary shares of Aspen to institutional investors.
The offer price will be determined by means of an accelerated bookbuild process which is to start immediately.
GSK said it will keep a seat on Aspen’s board and expressed its intention to remain a significant player in the South African company.
GlaxoSmithKline sold its brands to Aspen
Earlier in September, GlaxoSmithKline plc (NYSE:GSK) (LON:GSK) sold two thrombosis brands and a French plant to South African peer Aspen for £700 million ($1.13 billion, or 834 million euros).
GSK indicated its sale of Arixtra and Fraxiparine products to Aspen was to enhance its commitment to focus on products with the most growth potential.
Aspen is a top generic drugs maker in the southern hemisphere and is also Africa’s largest pharmaceutical manufacturer.
GlaxoSmithKline’s 16% stake in Aspen
During 2009, GlaxoSmithKline plc (NYSE:GSK) (LON:GSK) paid £279 million to buy a 16% stake in Aspen in a deal that was widely considered to be game-changing. Under the agreement, GSK transferred to Aspen both the rights of eight of its off-patent drugs and its factory in Bad Oldesloe in Germany, which makes some of these drugs as well as others already transferred to Aspen last year. GlaxoSmithKline plc (NYSE:GSK) (LON:GSK) also transferred marketing and distribution rights on all its existing products within South Africa.
GlaxoSmithKline plc (NYSE:GSK) (LON:GSK)’s chief strategy officer David Redfern said his company has a long and successful partnership with Aspen, with GSK’s investment in Aspen having grown in value significantly over time. After due assessment, GlaxoSmithKline plc (NYSE:GSK) (LON:GSK) now decided to realize some of this value without altering the basis of the partnership.
Britain’s biggest pharmaceutical company has entered into a placing agreement with Citigroup Global Markets Ltd and UBS Ltd to act as joint bookrunners in relating to the $28.2 million shares in Aspen.