Recasts, adds detail, background

By Yadarisa Shabong

Sept 27 (Reuters) - Haleon HLN.L plans to increase its stake in its Chinese joint venture to 88% from 55%, the British consumer healthcare company said on Friday.

It will pay 4.47 billion yuan ($637 million) to buy the stake from partners Tianjin Pharmaceutical Group (TPG) and Tianjin Pharmaceutical Da Ren Tang Group (DRTG), the London-listed firm said.

An increasing number of Western firms are pulling back from China due to heightened geopolitical tensions and slowing economic growth, but pharmaceutical companies have been an exception.

For Haleon, which was spun off from British drugmaker GSK GSK.L in 2022, the joint venture accounted for about 40% of its revenue from China last year.

CEO Brian McNamara called the additional stake "strategically and commercially" compelling.

"It reflects our commitment to this important market, the exceptional growth potential we see in China," he said in a statement.

Haleon shares were up 1% at 1200 GMT.

The joint venture produces and distributes brands such as wound ointment Bactroban and pain relief products Fenbid and Voltaren.

Haleon, which will fund the stake acquisition using existing cash and new third-party yuan-denominated debt, said the deal would add to its earnings per share.

Haleon will also have the option to buy the remaining 12% in the joint venture from DRTG once the deal closes, it said.

Drugmaker AstraZeneca said in May that a plant in Qingdao, China, would help it build a distinct local supply chain to serve the Chinese market. Late last year, it bought China-based cell therapy developer Gracell Biotechnologies for $1.2 billion.

($1 = 7.0134 Chinese yuan renminbi)

(Reporting by Yadarisa Shabong in Bengaluru; Editing by Vijay Kishore)

((Yadarisa.Shabong@thomsonreuters.com; +91 9742735150;))