Haleon PLC on Friday said it will significantly increase its stake in its joint venture in China.

The Weybridge, Surrey-based consumer healthcare firm which spun-out of GSK PLC in 2022 said it will acquire an additional 33% equity interest in Tianjin TSKF Pharmaceutical Co Ltd, its JV in China from its partners, Tianjin Pharmaceutical Group and Tianjin Pharmaceutical Da Ren Tang Group Corp Ltd for a total of ¥4.47 billion, about £500 million.

The acquisition, subject to regulatory clearances, will see Haleon increase its stake to 88% from 55%.

Haleon highlights that TSKF accounted for about 40% of its China revenue in financial year 2023. It will finance the acquisition via a combination of existing cash resources and new third-party CNY-denominated debt.

Haleon expects the acquisition to close by the end of 2024, and be accretive to earnings per share.

Further, the company agreed with Da Ren Tang that it will have an option to buy the latter’s remaining 12% shareholding in TSKF.

Haleon Chief Executive Officer Brian McNamara said: ‘China is a key strategic market for Haleon. Over the last three years, it has delivered strong market share growth and our acquisition of a further 33% in our JV partnership is an important milestone which is both strategically and commercially compelling. It reflects our commitment to this important market, the exceptional growth potential we see in China and is fully consistent with our capital allocation priorities to drive attractive returns for shareholders and maintain a strong investment grade balance sheet.’

Haleon shares were up 0.3% at 391.20 pence each on Friday morning in London.

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