Haleon Sells ChapStick to Suave Brands for $510 Million

Haleon is preparing to sell ChapStick to Suave Brands Company, a unit of U.S. private equity firm Yellow Wood Partners, in a deal estimated to be worth $510 million. The acquisition is expected to close in the second quarter of 2024.

This is subject to the satisfaction of customary closing conditions. Under the terms of the deal, Haleon will receive approximately $430 million in pre-tax cash proceeds and a passive minority stake in Suave worth approximately $80 million.

Haleon's CEO Brian McNamara said the company is spinning off its lip care brands in an effort to streamline its operations and pay down debt faster.

"Today's announcement is consistent with Haleon's proactive management of our portfolio," McNamara said, "While ChapStick is a great brand that is loved by consumers around the world, it is not Haleon's core focus. Selling the brand allows us to streamline the business and pay down debt faster. "We are confident the brand will continue to thrive under new ownership."

Haleon owns other household names like Sensodyne toothpaste, Panadol pain relievers and Centrum vitamins. ChapStick was founded in the early 1880s and had sales of £112m in 2023.

Suave Brands Company CEO Daniel Alter said the company is pleased to add ChapStick to its product portfolio. "Our management team is committed to building a platform of category-leading brands that consumers love while growing the brands in partnership with our retail customers and manufacturing partners. " Alter commented.