GlaxoSmithKline Plc (NYSE:GSK) is raising £900 million ($1.1 billion) by selling 270 million shares of Haleon Plc at 336.25 pence each, thereby reducing its ownership stake from 7.4%. This move is part of a broader strategy led by CEO Emma Walmsley, and influenced by Elliott Investment Management, to treat GSK's Haleon stake as a financial investment aimed at amplifying its pharmaceutical focus. This includes the successful development of an RSV vaccine.
According to InvestingPro data, GSK has a market cap of $72.89B USD and operates with a high return on assets, as evidenced by its 21.33% return on assets as of Q2 2023. The company has also demonstrated its financial robustness with a gross profit margin of 71.44% in the same period.
This share offering follows a previous sale by GSK that raised £804 million and is coordinated by Bank of America Corp (NYSE:BAC) and Citigroup Inc (NYSE:C). The decision by GSK mirrors a similar plan by Pfizer Inc. (NYSE:PFE), which intends to gradually sell off its stake in Haleon.
InvestingPro Tips suggest that GSK is a prominent player in the Pharmaceuticals industry, yielding a high return on invested capital. The company has maintained dividend payments for 23 consecutive years, underlining its commitment to its stockholders. However, it's worth noting that its revenue growth has been slowing down recently, and the company's short-term obligations exceed its liquid assets.
GSK's strategic move to reduce its stake in Haleon and raise capital for its core pharmaceutical business underlines the company's commitment to its primary sector, despite the potential profitability of other investments. This decision also signifies an ongoing trend among major pharmaceutical companies to streamline their investments and focus on their main areas of expertise.
In terms of Haleon Plc, the company has impressive gross profit margins and has been profitable over the last twelve months, according to InvestingPro Tips. Yet, like GSK, Haleon's revenue growth has been slowing down recently and its short-term obligations exceed its liquid assets. As of Q2 2023, Haleon's market cap is $37.67B USD, with a P/E ratio of 24.51.
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