After months of negotiations and a race against other global FMCG majors, Hindustan Unilever Limited has finally and officially emerged as the winner to bag GSK Consumer’s India business, including the popular Horlicks, Boost and other brands. Unilever is to acquire Horlicks and other health drink brands in India from drugs maker Glaxosmithkline (GSK) for as much as EUR 3.3 billion.
The merger of GSK’s listed Indian consumer healthcare business with Hindustan Unilever Limited (HUL), will be formed as one of the largest food and refreshment groups in the country.
The two companies said in separate filings with the stock exchanges agreed to a share exchange ratio of 4.39 shares of HUL for every one share of GSK Consumer India. The deal values GSK Consumer India at Rs 31,700 crore and is expected to be complete in 12 months. GSK Plc with 5.7% stake will become the second-largest shareholder in the merged entity. It can offload its stake to any investor and Unilever does not have exclusive rights to buy these shares.
GSK India’s brands include Horlicks and Boost. It employs around 4,000 people and distributes to more than 800,000 retail outlets. The Hindustan lever will own Boost, Viva and Maltova brands, whereas the Horlicks brand, which is currently owned by GSK Plc, is being acquired by parent Unilever and HUL will pay a royalty for its use in India.
Hindustan Unilever chairman Sanjiv Mehta said, “This is a very strategic and transformative move for us. Once the merger is complete, we see significant synergies in terms of top line and costs.”
This merger will strengthen HUL’s food and refreshments portfolio.