Unilever’s Indian arm, Hindustan Unilever Ltd (HUL) will acquire GlaxoSmithKline Consumer Healthcare Ltd (GSK CH India) via an all-equity merger, valuing the total business of the latter at Rs 31,700 crore.
FMCG giant Unilever will be acquiring health food portfolio, including popular brands Horlicks and Boost, from GlaxoSmithKline in India and over 20 other markets for 3.1 billion pounds (about Rs 27,750 crore).
As part of the transaction, Unilever’s Indian arm, Hindustan Unilever Ltd (HUL) will acquire GlaxoSmithKline Consumer Healthcare Ltd (GSK CH India) via an all-equity merger, valuing the total business of the latter at Rs 31,700 crore.
GSK CH India is the market leader in the health food drinks (HFD) category, with popular brands such as Horlicks and Boost.
Announcing the deal that also covers “Bangladesh and 20 other predominantly Asian markets”, Unilever said the transaction consists of an all-equity merger of HUL with the publicly-listed GSK Consumer Healthcare India and acquisition of 82 per cent stake in GSK Bangladesh Ltd.
It also includes acquisition of certain other commercial operations and assets outside India, it added.
HUL said its board has given nod for the all-equity merger of GSK CH India, under which with 4.39 shares of HUL will be allotted for every share in GSK CH India.
“The iconic Horlicks brand has a deep heritage, credibility and resonance around the world. The acquisition is transformative for our Foods and Refreshment business, allowing us to enter the Health Foods Drinks category, further strengthening our position in health and wellness,” Unilever President, Food & Refreshment, Nitin Paranjpe said.
Hindustan Unilever Chairman and CEO Sanjiv Mehta said with the strategic merger the company will be expanding its portfolio through “great brands into a new category catering to the nutritional needs of our consumers”.
“The turnover of our foods and refreshments (F&R) business will now exceed Rs 10,000 crore and we will become one of the largest F&R businesses in the country,” Mehta said.
HUL CFO Srinivas Pathak said at present the company’s F&R business is at around Rs 2,400 crore.
“We expect this business to grow in double digit over the medium term. This would be a significant opportunity,” he said in a concall.
Stating that “Horlicks has made a significant contribution to GSK and to the health of consumers across India for many decades”, GSK CEO Emma Walmsley said: “We believe Unilever is well placed to maximise its future potential”.
She further said that proceeds from this transaction will be used to support the group’s strategic priorities, including investing in our pharmaceutical business.
GSK said India remained an important market for it and the company will continue to invest in growth opportunities for its OTC and Oral Health brands there, which include Crocin, Eno and Sensodyne.