GlaxoSmithKline (NYS: GSK) announced today that it plans to raise its stakes in GlaxoSmithKline Consumer Nigeria and India-based GlaxoSmithKline Consumer Healthcare. The pharmaceutical's ownership in the Nigerian company will increase from 46.4% to 80% under the proposal that needs shareholder, regulatory, and court approvals, while its India stake will go from 43.2% to up to 75%. The deals will cost approximately $98 million and $936 million, respectively.
"This Proposal to increase GSK's ownership of GlaxoSmithKline Consumer Nigeria reiterates our long term support of the Company's strategy and our confidence in the continuing growth prospects of the business," said David Redfern, GSK's chief strategy officer, in a press release.
With reference to the company's increased Indian presence, Redfern said "GSK Consumer Healthcare is a well established business in India and its leading product, Horlicks, is an iconic household brand. This transaction represents a further step in GSK's strategy to invest in the world's fastest growing markets and, we believe, offers a liquidity opportunity at an attractive premium for existing shareholders."
Consumer Nigeria generated $136 million of turnover last year, and has enjoyed a 21% compound annual growth rate over the past for years, according to GSK. Consumer Healthcare turned over more than $500 million in FY 2011, and has averaged a 19% compound annual growth rate over the past five years.
The article GlaxoSmithKline Plans to Expand Indian and Nigerian Presence originally appeared on Fool.com.
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