The sale is expected to close in the second quarter of 2024, the company said.
Consumer healthcare group Haleon on Thursday announced that it has entered into a binding agreement for the sale of the ChapStick brand to Suave Brands Company, a company owned by American private equity firm Yellow Wood Partners.
The British consumer healthcare company has agreed to sell its lip balm brand to Suave for about $430 million in cash and a minority interest in the buyer, valued at around $80 million.
Haleon, which was spun off from the GSK Group in July 2022, said that cash proceeds from the sale would be used to pay down debt.
ChapStick generated £112 million ($142.5 million) in revenue in 2023, said Haleon, adding that the sale is likely to close in the second quarter of 2024.
Brian McNamara, Chief Executive Officer, Haleon, said: “Today’s announcement is consistent with Haleon being proactive in managing our portfolio, and being rigorous and disciplined where there are opportunities for divestment.
“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.”
The company said it would be providing further detail on the transaction and its impact within its FY 2023 results announcement on 29 February 2024.
Haleon’s product portfolio spans five major categories - oral health, pain relief, respiratory health, digestive health and other, and vitamins, minerals and supplements (vms) – and its other brands include Advil, Sensodyne, Panadol, Voltaren, Theraflu, Otrivin, Polident, parodontax and Centrum.
Last week, it was reported that Haleon was in talks with Indian pharmaceutical group Dr. Reddy's Laboratories to sell Nicotinell, the anti-smoking aid, but the transaction was likely to be below the $800 million asking price suggested earlier.
In July, Haleon completed the sale of Lamisil, an antifungal treatment, to Karo Healthcare for £235 million.
