Private equity firm Yellow Wood close to deal to acquire ChapStick-sources

By Abigail Summerville

(Reuters) – Private equity firm Yellow Wood Partners is in advanced talks to acquire ChapStick, a lip balm brand, from Haleon Plc, the former consumer health division of drug developer GSK Plc, four people familiar with the matter said.

Yellow Wood has prevailed in an auction for ChapStick that Haleon had launched, hoping to fetch about $600 million, the sources said. Yellow Wood’s offer came in lower than what Haleon was seeking, the sources added.

The two sides are close to reaching a compromise on a valuation, the sources said. If they succeed, a deal could be inked in the next few days, the sources added. It is possible that the discussions end without an agreement.

The sources asked not to be identified because the matter is confidential. Haleon and Yellow Wood declined to comment.

A deal for ChapStick would come on the heels of Yellow Wood’s acquisitions of Suave and Elida Beauty, a portfolio of personal care brands that includes Q-Tips, Brut, Caress, Timotei and Tigi, from Unilever last year. Based in Boston, Yellow Wood focuses on deals in the consumer sector.

GSK spun Haleon out into an independently listed company in London in 2022. Haleon, which has a market value of $29 billion, has been pruning its portfolio to focus on its more popular consumer health brands, such as Advil, Tums and Centrum.

(Reporting by Abigail Summerville in New York; Editing by Sharon Singleton)