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GlaxoSmithKline plans US$1 billion spend to raise its stake in Indian unit

MUMBAI--Britain's GlaxoSmithKline said Monday it intends to increase its stake in its Indian pharmaceutical unit by more than a billion dollars, in a bid to enlarge its presence in emerging markets.

The firm announced an open offer to shareholders to buy 20.61 million shares at 3,100 rupees (US$50) each. The purchase would raise its stake in the local subsidiary from 50.7 percent to 75 percent, according to a company statement sent to the Bombay Stock Exchange.

GlaxoSmithKline Pharmaceuticals shares soared 19.5 percent to a day's high of 2,952 rupees after the news.

The parent company said it planned to keep the Indian unit listed after raising the stake.

GSK Pharma makes a range of drugs and vaccines used to treat respiratory problems, skin disease, cancer, diabetes and heart ailments.

This year, GlaxoSmithKline has already raised its stake in another listed Indian subsidiary, GSK Consumer Healthcare, to 72.5 percent from 43.2 percent.

Analysts say the moves are part of a bid to enlarge alternative markets given the tough conditions in Europe.

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