GlaxoSmithKline share price: Drugmaker divests opiates business Down Under

on Mar 3, 2015
Updated: Oct 21, 2019

GlaxoSmithKline Plc (LON:GSK) has agreed to sell its Australian opiates business to India’s Sun Pharmaceutical Industries, the two companies have said. GlaxoSmithKline’s share price has inched higher in today’s trading, having gained 0.47 percent to 1,561.25p as of 13:43 GMT.

GSK and Sun Pharma announced in a joint press release this morning that the Mumbai-based drugmaker had agreed to buy the UK group’s opiates business in Australia for an undisclosed amount. The business includes manufacturing sites in Victoria and Tasmania, as well as a product portfolio consisting of poppy-derived opiate raw materials which are primarily used in the manufacture of analgesics for the treatment of moderate to severe pain. GSK supplies a quarter of the world’s medicinal opiate needs from poppies grown by farmers in Tasmania, as noted on the company’s website.

The FTSE 100 drugmaker noted that the transaction would enable it to simplify its Australian operations and “focus on delivering its innovative product portfolio” in the country.
“The opiates business has been an important part of our Australian business for many years, but as our portfolio transitions, we believe now is the right time to hand this business over to someone else,” Steve Morris, general manager of GSK Opiates, said in the statement.

While the two companies pointed out that the financial terms of the transaction were confidential, The Australian quoted sources as expecting the opiates business to be worth well over the A$252 million (£128 million) threshold which opens the door for the Australian government to object the sale if it chooses. GSK and Sun Pharma noted that the transaction, expected to close in August, was subject to customary closing conditions as well as requisite regulatory and other approvals.
As of 14:37 GMT, Tuesday, 03 March, GlaxoSmithKline plc share price is 1,565.00p.

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