Danone and Nestle among bidders for 72% stake in GSK’s consumer business

INDIA – Multinational companies including France’s Danone, Hindustan Unilever and Nestle are competing with the American global investment firm, KKR & Co for a 72% stake in GlaxoSmithKline plc’s Indian consumer products business, GSK Consumer Healthcare for US$4 billion, reports ET Retail.

The deal, considered to be the biggest in the Indian consumer industry has attracted a contest from other global companies such as PepsiCo, Abbott, ITC and Mondelez.

GSK, the UK based pharmaceutical company is said to be mobilizing resources to fund its US$13-billion acquisition of Novartis’ consumer products.

Since the appointment of Emma Walmsley as CEO last year, the firm has been making big moves after it dropped a decision to buy Pfizer’s consumer healthcare business, endangering an auction the U.S. company hoped would bring in as much as $20 billion, cites Reuters.

According to sources identified by ET Retail, the transaction was expected to gain momentum in June when the indicative bids turn into formal non-binding ones plus another round of negotiations.

72% stake in GSK was valued at US$2.63 billion and the deal may include an open offer to minority shareholders of GSK Consumer Healthcare.

GSK, which makes popular consumer brands such as Boost and Horlicks had said on March 27 that it would assess its Indian consumer healthcare subsidiary as it looks to fund a buyout of Novartis’ stake in their global consumer healthcare joint venture.

“These brands (Boost and Horlicks) are licensed and distributed through GlaxoSmithKline Consumer Healthcare Ltd, a publicly listed company in India in which GSK owns 72.5% stake.

We are conducting this strategic review in support of our transaction to buy out the Novartis stake in our Consumer Healthcare joint venture with Novartis.

We expect the outcome of the strategic review to be concluded around the end of 2018.

There can be no assurance that the review process will result in any transaction,” said the company on March 27.

Analysts expected a global sale of the Horlicks brand, or a slump sale of Malted Food Drink (MFD) brands in India (Horlicks, Boost) and allied assets.