GlaxoSmithKline In Exclusive Talks To Sell Horlicks Unit To Unilever

GlaxoSmithKline In Exclusive Talks To Sell Horlicks Unit To Unilever

GlaxoSmithKline In Exclusive Talks To Sell Horlicks Unit To Unilever

Horlicks, a 140-year-old brand, a malted drink in India is been sold to Unilever. Unilever to acquire Horlicks and other consumer healthcare nutrition products from GlaxoSmithKline. London/Rotterdam –Unilever announced it has signed an agreement to acquire the Health Food Drinks portfolio (GSK HFD) of GlaxoSmithKline (GSK) in India.

The three elements:

  • All Equity merger of Hindustan Unilever Ltd. (HUL) with the publicly listed GSK Consumer Healthcare India (GSK CH India),
  • Acquisition of 82% stake in GSK Bangladesh Limited (GSK Bangladesh), and
  • Acquisition of certain other commercial operations and assets outside India.

The transaction is aligned with Unilever’s stated strategy of increasing its presence in health-food categories and in high-growth emerging markets.

The acquisition of GSK Consumer Healthcare would help Hindustan Unilever make its most ambitious foray into the health and wellness space.

History of Horlicks in India

GSK HFD is the undisputed leader in the Health Food Drinks category in India.  The iconic brands such as Horlicks and Boost and a product portfolio supported by strong nutritional claims are from GSK. This portfolio has a long history in India with Horlicks having originally been introduced in the 1930s.

GlaxoSmithKline In Exclusive Talks To Sell Horlicks Unit To Unilever

Horlicks products have been an everyday staple in South Asian households across generations. Over the last 15 years, the portfolio has grown at a double-digit rate. Despite this, the category still remains under-penetrated in India. Unilever is well positioned to further develop the market given the extent of its reach and capabilities.

Horlicks deal:

The market for health food drinks in India is estimated at Rs.7,000 crore, according to HUL, with Horlicks accounting for around 60% of volume.

HUL will also market and distribute some brands of GSK Healthcare such as Sensodyne, Otrivin, Crocin and Eno.   The total consideration for the deal is 4.6 billion euros.  Of which Unilever’s implied contribution is through cash and the issue of shares in HUL.

Following the issue of new HUL shares, Unilever’s holding in HUL will be diluted from 67.2 per cent to 61.9 per cent. The transaction will be EPS-accretive (earnings per share-accretive), on an underlying basis, immediately after completion.

The deal is expected to be completed in 12 months

GlaxoSmithKline In Exclusive Talks To Sell Horlicks Unit To Unilever

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