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MUMBAI, Dec 16 (Reuters) - GlaxoSmithKline Plc (GSK) said on Monday it plans to raise its stake in its Indianpharmaceutical unit to up to 75 percent from 50.7 percentthrough an open offer in a deal worth about 629 million pounds($1.02 billion).
With the latest India deal, GSK is set to spend close to $2billion in roughly a year to increase its holdings in two listedIndian companies, underscoring the British drugmaker's drive todeepen its footprint in emerging markets.
In February, GSK lifted its stake in its publicly-listedIndian consumer healthcare subsidiary, GlaxoSmithKline ConsumerHealthcare Ltd, to 72.5 percent from 43.2 percent for$901 million.
The deals are the latest of several by GSK which is reducingits reliance on traditional prescription drug markets in Westerneconomies where sales are slowing.
On Monday, GSK said it would buy up to 20.6 million sharesof GlaxoSmithKline Pharmaceutical Ltd at 3,100 rupeesa share, a premium of 26 percent over its closing market priceon Friday. The company said that it planned to keep the Indianunit listed even after raising the stake.
As per Indian regulations, promoters of listed companies canhold up to a maximum 75 percent stake. If the promoter'sshareholding rises beyond 75 percent, the company has to bede-listed from the bourse.
"For GSK this transaction will increase exposure to astrategically important market and for our Indianpharmaceuticals subsidiary's shareholders. We believe it offersa good liquidity opportunity at an attractive premium," DavidRedfern, chief strategy officer of GSK, said in a statement.
The transaction will be funded by GSK's existing cash andwill be earnings neutral for the first year and accretivethereafter, the company said in a statement.
GSK's Indian pharmaceuticals unit makes drugs for variousareas including respiratory, cardiovascular, oncology,anti-infectives and dermatology. The offer is likely to begin inFebruary and the deal is being managed by HSBC.
