INDIA – Unilever has announced that Hindustan Unilever Limited (HUL), the company’s listed subsidiary in India, has successfully completed the merger of GSK’s business in India, GlaxoSmithKline Consumer Healthcare.
The consolidation follows HUL’s acquisition of Horlicks brands rights and other consumer healthcare nutrition products in India and other markets for cash proceeds equivalent to US$493 million.
The transaction was previously announced in December 2018 as part of HUL’s strategy to evolve the foods and refreshment portfolio into higher growth segments.
The deal included an all-equity merger of with the publicly listed GSK Consumer Healthcare India, acquisition of 82% stake in GSK Bangladesh and acquisition of certain other commercial operations and assets outside India.
According to the initial terms of the agreement, Unilever was to pay GSK US$446 million in cash for the commercial operations in 20 other predominantly Asian markets and their intellectual property rights and an additional US$184 million for the 82% in GSK Bangladesh.
The total consideration for the overall transaction was valued at US$5bn, of which Unilever‘s implied contribution through both cash and through the issue of shares in HUL totals to US$3.6bn.
Unilever and GSK revealed that they have secured all necessary approvals to proceed with the transaction in India while the Bangladesh closing is expected to follow later this quarter, subject to local procedures.
Following the merger, Unilever’s holding in HUL will be diluted from 67.2% to 61.9%.
Unilever says that the transaction is aligned with the company’s strategy of increasing its presence in health-food categories and in high-growth emerging markets.
The consumer good major sees GSK’s Inidan business as a leader in the Health Food Drinks category in India, with iconic brands such as Horlicks and Boost, and a product portfolio supported by strong nutritional claims.
On its part, GSK said that India remains an important growth market for the company and it is committed to investing in both its listed Pharmaceuticals business and its OTC and Oral Health brands in the country.
As part of the transaction, HUL will distribute these consumer healthcare brands while GSK will continue to be responsible for demand generation, portfolio strategy, R&D and marketing for these brands.
Brian McNamara, CEO, GSK Consumer Healthcare, said: “The close of this transaction signals the beginning of an exciting new chapter for GSK in India, enabling us to focus and build on our portfolio of brilliant, science-based OTC and Oral Health brands and to make these products available to more consumers across the country.”