GlaxoSmithKline (LON:GSK) has boosted its stake in its Saudi Arabian unit, The Times has reported. The move comes as the company looks to benefit from the kingdom’s plan to transform its economy and increase the local manufacturing of pharmaceutical products.
GSK’s share price has advanced in London in today’s session, having added 0.65 percent to 1,312.50p as of 09:49 GMT, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.23 percent higher at 7,554.47 points. The group’s shares have lost more than 14 percent of their value over the past year, as compared with about a 7.5-percent rise in the Footsie.
GSK hikes stake in Saudi venture
The Times reported this morning that GSK had hiked its stake in its Saudi Arabian unit to 75 percent. Before the acquisition, the UK group owned 49 percent of Glaxo Saudi Arabia, a business formed in 1992 with local partner Banaja KSA Holding Company. The London-listed drugmaker further plans to invest more than 900 million riyals (£179 million) in its Saudi operations over the next three years. It plans to expand production at its Jeddah site by 30 percent.
The newspaper notes that healthcare is one of several sectors the kingdom wants to reform under its 2030 plan to diversify the economy away from a reliance on oil under plans instigated by Mohammed bin Salman, its crown prince.
Analysts on GSK
Berenberg Bank reaffirmed its ‘buy’ rating on GSK last week, valuing the shares at 1,760p, while Citigroup continues to see the pharmco’ as a ‘neutral,’ with a price target of 1,400p. According to MarketBeat, the blue-chip drugmaker currently has a consensus ‘hold’ rating and an average price target of 1,590.17p.