GSK sells another chunk of South Africa's Aspen

GlaxoSmithKline (GSK) has cashed in part of its holding in South Africa's Aspen Pharmacare, raising cash to help fund the ongoing restructuring of its business.

GSK has owned a stake in Aspen since 2009, when it paid an estimated $418m for an 18% share in Africa's biggest domestic pharmaceutical manufacturer and granting it the right to distribute GSK products in sub-Saharan Africa. 

Towards the end of 2013 the big pharma company sold off shares equal to 6% of the company for $740m, and has now offloaded all but 6%, raising £574m ($854m), which would seem to be a healthy return on its initial investment. 

Simon Dingemans, GSK's chief financial officer, said the sale would provide "financial flexibility" as the group "reshapes around [its] core franchises" in the wake of its asset-swap deal with Novartis, which has just come to fruition. 

GSK sold its oncology portfolio to Novartis in return for the latte's non-flu vaccines portfolio, while the two companies are also setting up a consumer health joint venture. Meanwhile, GSK is also considering a spin out of its HIV unit ViiV Healthcare.

"As a result we have decided now is the right time to realise further value from this successful relationship," said Dingemans, although GSK said it had agreed not to offload any more shares for six months.

GSK has a longstanding relationship with Aspen, which included the sales of its thrombosis treatments products Arixtra (fondaparinux sodium) and Fraxiparine (nadroparin) to the South African firm in 2012 in a deal valued at around £700m ($1.1bn). 

In the same year, Aspen also took control of a GSK generic drugs unit in Australia and bought one of the UK-based company's manufacturing facilities in France. The company is also said to be looking at further acquisitions to boost its international presence, with a particular hankering for opportunities in Asia.

"We continue to believe in the strategy of Aspen and we remain committed to working together in the future," said Dingemans.

The profit on the disposal will not be included in core operating profit and core earnings per share in 2015 and GSK said it would no longer account for Aspen as an associate after the sale.