Haleon is selling ChapStick to Suave Brands Company in a deal estimated to be worth US$510m.
The British consumer healthcare group’s CEO Brian McNamara said it is offloading the lip care brand so it can “simplify” its operations and “pay down debt more quickly”.
Suave Brands Company, owned by US private equity firm Yellow Wood Partners, is set to acquire the brand in the second quarter of 2024.
But this is subject to the satisfaction of customary closing conditions.
The terms of the transaction will see Haleon receive approximately $430m in pre-tax cash proceeds.
As well as a passive minority stake in Suave valued at around $80m.
ChapStick, which was created in the early 1880s, generated £112m in sales last year.
“Today’s announcement is consistent with Haleon being proactive in managing our portfolio,” said McNamara.
“And being rigorous and disciplined where there are opportunities for divestment.
“While ChapStick is a great brand, much loved by consumers around the world, it is not a core focus for Haleon.
ChapStick generated £112m in sales in 2023
“Selling the brand allows us to simplify our business and pay down debt more quickly.
“We are confident the brand will continue to thrive under its new ownership.”
Haleon owns other household brands such as Sensodyne toothpaste, Panadol pain relief and Centrum vitamins.
Suave Brands Company CEO Daniel Alter said the company was “excited” to add ChapStick to its portfolio.
“Our management team is focused on building a platform of category leading brands that consumers love,” commented Alter.
“While working with our retail customers and manufacturing partners to grow the brands.”
A lot of acquisitions have happened in the beauty industry over the past two months.
RoC Skincare has been acquired by investment group Bridgepoint for an undisclosed sum.
Beauty group Puig has snapped up a majority stake in German skin care brand Dr. Barbara Sturm.
Meanwhile, Shiseido is buying New York derma cosmetics brand Dr. Dennis Gross Skincare in a bid to strengthen its skin care portfolio.