(Bloomberg) -- Haleon Plc, the consumer health business spun out from British pharmaceutical producer GSK Plc, is in the early stages of studying large potential deals to bulk up its brand portfolio, people with knowledge of the matter said. 

London-listed Haleon has been evaluating the merits of possible transactions for the medium- to long-term, including a combination with Sanofi’s $30 billion consumer-health arm, according to the people. 

Haleon shares rose as much as 4.3% on Tuesday. The stock was up 1.1% at 2:17 p.m. in London, giving the company a market value of £29.9 billion ($36.9 billion).

Haleon, which makes Aquafresh toothpaste and Advil pain relievers, has also been weighing other potential merger options, the people said, asking not to be identified because the information is private. The UK company plans to wait until it can show several quarters of strong profit and progress on its debt reduction plan before it proceeds with any major deals, the people said. 

It could opt to structure any transaction as an all-stock merger to avoid the need to increase its borrowings, according to the people. Haleon’s exploratory work is still at a preliminary stage, and there’s no certainty it will decide to pursue any deals. Representatives for Haleon and Sanofi declined to comment.

Johnson & Johnson is preparing a separate listing of its consumer health business, which makes Neutrogena cleansers and Listerine mouthwash. Meanwhile, activist investors have been pushing Bayer AG to consider a divestment of its consumer health arm as part of a broader revamp. 

A major combination could help Haleon grow large enough that it’s less vulnerable to a takeover itself. GSK Plc rejected a £50 billion bid for the business made by Unilever Plc in late 2021 and moved forward with a separate listing. GSK still owns around 13% of Haleon, while Pfizer Inc. is its largest shareholder with a stake of about 32%, according to data compiled by Bloomberg. 

In its listing prospectus last year, Haleon said that it aims to maintain an investment-grade balance sheet with a target net debt of less than three times adjusted earnings by the end of 2024. It has also said it would pursue selective bolt-on acquisitions. 

--With assistance from Michelle F. Davis, Tim Loh and Nacha Cattan.

(Updates shares in third paragraph.)

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