Haleon plc has reached a binding agreement to sell the iconic ChapStick brand to Suave Brands Company in a strategic move aimed at strengthening its financial position.

The transaction, valued at approximately $US430 million ($653 million ) in pre-tax cash proceeds, also includes a passive minority interest in Suave Brands Company valued at US$80 million ($121 million).

Haleon plc, based in Weybridge, England, is a leading British multinational in consumer healthcare.

Renowned worldwide, it boasts a robust portfolio featuring ChapStick lip balm, Sensodyne toothpaste, Panadol and Advil painkillers, and Centrum vitamins.

The money earned from selling ChapStick will be specifically designated to paying off debts, which will strengthen the company’s confidence in achieving a financial metric called the net debt/Adjusted EBITDA ratio, which measures the company’s ability to pay off its debts relative to its earnings.

ChapStick, established in the early 1880s and known for its enduring popularity, contributed £112 million ($215 million)  in revenue for the fiscal year ending December 31, 2023.

Brian McNamara, Chief Executive Officer, Haleon, said: “While ChapStick is a great brand, much loved by consumers around the world, it is not a core focus for Haleon. Selling the brand allows us to simplify our business and pay down debt more quickly. We’re confident the brand will continue to thrive under its new ownership.”

 The sale is pending satisfaction of customary closing conditions and is expected to be finalised in the second quarter of 2024.

Haleon plc will provide further details on the transaction’s impact in its FY 2023 Results announcement scheduled for February 29, 2024.

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