Haleon to Sell ChapStick Lip Balm Brand for $430 Million
Healthcare products company Haleon is selling off ChapStick.
Offloading the lip balm brand aligns with Haleon’s strategy to streamline business operations and grow more agile. ChapStick will now be owned by Suave Brands, the portfolio of personal care goods Yellow Wood Partners, acquired last year from Unilever.
Under the terms of the deal, Haleon will receive pre-tax cash proceeds of approximately $430 million and a passive minority interest in the Suave Brands Company.
Haleon's Strategic Shift
The result of a 2019 merger between pharmaceutical giants Pfizer and GSK, Haleon now serves more than 100 markets and includes brands such as Sensodyne, Advil, and Centrum vitamins. Around a year after the deal, Haleon introduced widescale cost-cutting measures and restructuring aimed at saving approximately $393 million.
Reporting on the company’s 2022 financials, Haleon’s chief executive, Brian McNamara, outlined plans for the future, noting that the company would focus on “driving growth across our portfolio of brands and structural growth categories” and would be “proactive in managing our portfolio,” which would include “being rigorous and disciplined” about “opportunities for bolt-on acquisitions and divestments.”
Hear more from Haleon's CDTO, Bhaumik Sharma, at Analytics Unite 2024. Register here.
This latest sale appears to be one such rigorous and disciplined divestment. “While ChapStick is a great brand, much loved by consumers around the world, it is not a core focus for Haleon,” said McNamara.
See Also: Unilever's New Direction: Streamlined Portfolio, Leadership Refreshes, Power Brand Prioritization
Last year, the company sold athlete’s foot cream brand Lamisil to Karo Healthcare. In the same year, the company reportedly planned and carried out sweeping job cuts to streamline and consolidate its global workforce.
“Selling the brand allows us to simplify our business and pay down debt more quickly,” McNamara also said of the ChapStick sale.
On Yellow Wood Partners' part, the private equity firm has been channeling efforts into expanding its beauty and personal care portfolio, most recently purchasing Elida Beauty from Unilever.
Commenting on news of the ChapStick acquisition, Suave Brands CEO Daniel Alter said “Our management team is focused on building a platform of category-leading brands that consumers love while working with our retail customers and manufacturing partners to grow the brands.”
