Consumer healthcare company Haleon has agreed to sell its Chapstick lip balm brand to Yellow Wood Partners in a deal worth $510m (£401m) as part of efforts to “simplify” its business model.
Haleon is set to receive pretax cash proceeds of approximately $430m, as well as a passive minority interest in Yellow Wood’s portfolio company Suave Brands valued at around $80m.
The firm said cash proceeds from the sale would be used to pay down debt and strip out a non-core business.
FTSE 100-listed Haleon was spun out from GSK, formerly known as GlaxoSmithKline, in a blockbuster £31bn listing in 2022.
GSK is still its second largest shareholder, after US pharmaceutical giant Pfizer.
Haleon’s other brands include Centrum multivitamins, Voltaren painkillers and anti-inflammatory Advil.
It expected the deal to close in the second quarter of this year, “subject to the satisfaction of customary closing conditions”.
Brian McNamara, the firm’s chief executive, said: “While ChapStick is a great brand, much loved by consumers around the world, it is not a core focus for Haleon. Selling the brand allows us to simplify our business and pay down debt more quickly. We’re confident the brand will continue to thrive under its new ownership.”
Haleon is due to report its full-year results on 29 February. Chapstick generated £112m in revenue in 2023.
