GSK to spend $1 bn to raise stake in Indian drugmaker GlaxoSmithKline Pharmaceuticals Ltd

Reuters Posted online: Monday, Dec 16, 2013 at 0000 hrs
Mumbai : GlaxoSmithKline Plc (GSK) said on Monday it plans to raise its stake in its Indian pharmaceutical unit to up to 75 per cent from 50.7 percent, through an open offer, in a deal worth about 629 million pounds ($1.02 billion).

GSK will buy up to 20.6 million shares of GlaxoSmithKline Pharmaceuticals Ltd at 3,100 rupees a share, a premium of 26 percent over its market price on Friday, the company said in a statement.

The British drugmaker said it plans to keep the Indian unit listed even after raising the stake.

As per Indian regulations, promoters of stock exchange-listed companies can hold up to a maximum of 75 percent stake. If the promoter shareholding rises beyond 75 percent, then the company has to be de-listed from the bourses.

In February, GSK lifted its stake in its publicly-listed Indian consumer healthcare subsidiary to 72.5 percent from 43.2 percent for $901 million, deepening its footprint in emerging markets and non-prescription products.

Shares in India's GlaxoSmithKline Pharmaceuticals Ltd surged 20 per cent in pre-open trading to its maximum daily limit.