LONDON (ShareCast) - (Sharecast News) - Haleon said on Friday that it has agreed to buy an additional 33% interest in Tianjin TSKF Pharmaceutical - its joint venture in China - from its partners Tianjin Pharmaceutical Group (TPG) and Tianjin Pharmaceutical Da Ren Tang Group Corporation (DRTG) for RMB4,465m (circa£0.5bn).

The consumer health company which was spun off from GSK said TSKF accounted for about 40% of Haleon's China revenues in FY 2023. TSKF manufactures and/or distributes leading brands such as Fenbid, Voltaren and Bactroban.

It said the acquisition will increase Haleon's participation in TSKF from 55% to 88% and deliver "greater control and increased strategic and operational flexibility across the business".

The deal is expected to be funded through a combination of Haleon's existing cash resources and new third-party Renminbi-denominated debt. It is expected to close at the end of this year and to be accretive to earnings per share.

In addition, Haleon and DRTG have agreed that once the deal is complete, Haleon will have an option to buy and DRTG an option to sell the remaining 12% shareholding in TSKF.

Chief executive Brian McNamara said: "China is a key strategic market for Haleon. Over the last three years, it has delivered strong market share growth and our acquisition of a further 33% in our JV partnership is an important milestone which is both strategically and commercially compelling.

"It reflects our commitment to this important market, the exceptional growth potential we see in China and is fully consistent with our capital allocation priorities to drive attractive returns for shareholders and maintain a strong investment grade balance sheet."

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