GlaxoSmithKline Plc to spend $1 billion to increase stake in India subsidiary

GlaxoSmithKline Plc to spend $1 billion to increase stake in India subsidiaryU. K.-based pharmaceuticals giant GlaxoSmithKline Plc (GSK) on Monday confirmed that it would invest nearly $1 billion (Rs 6,389 crore) to increase its stake in its Indian arm.

GSK announced that it would acquire more than 2.06 crore shares or nearly 24.33 per cent stake in GlaxoSmithKline Pharmaceuticals Ltd (GSK Pharma) at a price of Rs 3,100 per share through an open offer.

The offered price of Rs 3,100 a share represents a premium of around 26 per cent over the stock's Friday's closing price of Rs 2,460.15 apiece on the National Stock Exchange (NSE).

David Redfern, chief strategy officer at the company, said, "This transaction will increase our exposure to a strategically important market. For our Indian pharmaceutical subsidiary's shareholders, we believe it offers a good liquidity opportunity at an attractive premium."

Following the planned acquisition, the British pharmaceuticals giant's stake in the Indian arm will jump from 50.67 per cent to up to 75 per cent. Earlier, in February this year, GSK Plc spent $901 million to hike its stake in its Indian consumer healthcare division GlaxoSmithKline Consumer Healthcare Ltd from 43.2 per cent to 72.5 per cent.

Subject to regulatory approvals, the open offer is expected to start in February next year.

GSK Pharma shares jumped more than 19 per cent to hit its 52-week high of Rs 2,952 before closing at Rs 2927.40 apiece, up 18.60 per cent, on the BSE on Monday.