INDIA – GlaxoSmithKline Consumer Healthcare (GSKCH India) has said that the Competition Commission of India (CCI) has approved its merger deal with Hindustan Unilever, India’s largest consumer goods company.
This follows the December 3 announcement made by Unilever to acquire GSK’s consumer health business alongside its leading health-drink brands in a transaction valued at US$3.8 billion.
CCI, which is responsible for enforcing The Competition Act, 2002 has approved the scheme of amalgamation between the two companies, through an-all equity deal, valuing the total business of the latter at US$4.46 billion (Rs 31,700 crore).
“We would like to inform you that the CCI has, vide its letter dated January 23, 2019 (received on January 25, 2019), accorded its approval for the amalgamation of the Company with HUL,” GSKCH India said in a regulatory filing.
“A copy of the order of the CCI is awaited.”
The transaction, involving malted drinks brand, Horlicks and other health products was made through an all-equity deal increases Unilever’s presence in health-food categories and in high-growth emerging markets.
GSK CH India is the market leader in the health food drinks (HFD) category with other brands such as Boost, India’s leading malt-based food drink in chocolate flavour.
According to the company’s chief financial officer, Srinivas Phatak, the merger deal still awaits the approval from other regulatory bodies before it possibly comes to a close in the next six to nine months.
“The scheme remains subject to the receipt of other necessary statutory and regulatory approvals under applicable laws, including by the National Stock Exchange of India Limited, BSE Limited, Securities and Exchange Board of India, the National Company Law Tribunal, and the respective shareholders and creditors of HUL and the company,” read a GSK statement.
Unilever is set to compete in India’s malt-based hot drinks segment, which is estimated at US$1.1 billion, according to Euromonitor.
The product competes specialised products made by nutraceuticals companies like Abbott and Danone with common brands such as Ensure, Pediasure and Protinex.