GSK and Pfizer List Haleon
GSK and Pfizer List Haleon
By Jake Rickman
What do you need to know this week?
Last week marked the completion of one of the largest and most complex de-mergers in the history of the European public markets. Haleon plc, formerly a joint venture between two titans of the pharmaceutical and healthcare industry, GSK and Pfizer, started publicly trading on 18 July at £3.30 per share, though shares have dropped to £3.07 as of 25 July.
This deal is important to market analysts for a few reasons. Most importantly, because this is one of the largest demergers and re-listings on the London Stock Exchange since 2011. This demonstrates to investors that the London Stock Exchange is proving at least somewhat resilient in the face of Brexit and wider macroeconomic concerns (i.e. inflation and an impending recession).
Why is this important for your interviews?
Haleon’s de-merger is arguably one of the most high-profile deals to have been finalised in the past couple of years. If you are interested in corporate law, interviewers are likely to enjoy discussing with you the key features of the deal and the commercial reasoning behind it.
The deal was first announced in 2018 when Pfizer and GSK agreed to combine their consumer healthcare divisions into a single joint venture. This followed GSK’s decision not to acquire Pfizer’s consumer healthcare business earlier that year. Instead, by creating a joint venture in the form of a new company — Haleon — jointly owned by the two pharma giants, the businesses could separate their consumer healthcare business from their biopharma and vaccine divisions.
For GSK, the de-listing marks a major step in its wider strategic realignment. The pharma-healthcare conglomerate has faced investor criticism for underperformance. By offloading its consumer healthcare business through the new venture and later re-listing it on the public market, GSK has reduced the size of debt on its balance sheet.
From the perspective of investors, Haleon is now the only pure consumer healthcare company trading on the public market. This means investors can now directly buy into a market valued at more than $300bn and one that analysts predict will grow to $520bn by 2027.
How is this topic relevant to law firms?
A deal of this size and complexity inevitably requires the instruction of dozens of legal advisers across multiple practice groups.
As The Lawyer details in an article, the deal was driven by GSK’s in-house counsel James Ford and Sarah Clements, who is the legal head of GSK’s group transformation and separation. Together, they coordinated GSK’s external advisers on both sides of the Atlantic.
Slaughter and May, who advised GSK on the incorporation of the joint venture in 2018, enlisted partners across its corporate, tax, finance, pensions, and employment practice groups. Baker McKenzie was also instructed to advise on corporate, IT, and employment matters.
US firms Sidley Austin and Cleary Gottlieb advised GSK on debt financing and US securities issuances. Pfizer was separately represented by Wachtell Lipton Rosen & Katz in the US and Clifford Chance in the UK. Haleon was independently advised by Freshfields.