HUL merges with GSK, becomes Horlicks new owner

Biggest news of FMCG industry, Hindustan Unilever Ltd (HUL) announced the merger with GlaxoSmithKline Consumer Healthcare (GSKCH). We received all the important regulatory approvals for the merger of GSKCH into the company, HUL shared.

This new merger of the two companies will have 4.39 HUL shared for every GSK CH India share, coming out as a whole equity value of Rs 31,700 crore for 100% of GSK CH India.

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“Moreover, the board of HUL also approved procuring the famous health drink brand Horlicks for India from GSK for a consideration of Euro 375.6 million (Rs 3,045 crore), exercising the choice available in the original agreement between its parent firm Unilever and GSK,” HUL further added.

With this, brands like Horlicks, Boost and Maltova will now be HUL, the maker of Dove, Pears and Lipton brands. This deal will even permit HUL to use cash on its balance sheet and make value creation for all shareholders, the company noted.

“This will enable HUL to utilise cash on its balance sheet and create value for shareholders. Also, it will enable HUL to drive better salience in a local context. The other brands which were under the possession of GSKCH like Boost, Maltova and Viva come to HUL’s brand portfolio by virtue of the merger,” the statement asserted.

Originally launched in the 1930s, Horlicks products have a long history in the country. A leader in the malt-based beverages segment, Horlicks has 43 per cent market share followed by Mondelez International’s Bournvita, which has around 13 per cent share.

The company said that the merger is in line with HUL’s strategy to make a sustainable and profitable food and refreshment business in India by leveraging the mega trend of health and wellness. The deal would also unwind the chances for HUL in Health Food Drinks (HFD) market as GSKCH was the market leader in the field.

On December 3, 2018, FMCG giant Unilever announced the acquisition of health food portfolio, including popular brands Horlicks and Boost, from GSKCH India and over 20 other markets.