Hindustan Unilever Limited (HUL) on Monday said it will merge with the GlaxoSmithKline’s Consumer Healthcare business valuing it at Rs 31,700 crore.
The merger of GSK Consumer with HUL will be on a basis of a share swap ratio of 4.39 HUL shares for each GSK Consumer share, implying a total equity value of Rs 31,700 crore for 100% of the latter. Following the issue of new HUL shares, Unilever‘s holding in HUL will be diluted from 67.2% to 61.9%, the company said.
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GSK Consumer Healthcare India is the market leader in the health food category, with iconic brands such as Horlicks and Boost. GSK has a long history in India with Horlicks having originally been introduced in the 1930s.
Sanjiv Mehta, Chairman and CEO, Hindustan Unilever said: “With this strategic merger of Hindustan Unilever and GSK Consumer Healthcare India Limited, we will be expanding our portfolio through great brands into a new category catering to the nutritional needs of our consumers. I am confident that this merger will create significant shareholder value through both revenue and cost synergies. The turnover of our Foods & Refreshments business will now exceed Rs. 100 billion and we will become one of the largest F&R businesses in the country. We look forward to welcoming new brands and great talent into the Unilever and HUL family, once the transaction is complete.”
The acquisition is in line with the Hindustan Unilever’s strategy to build a sustainable and profitable Foods and Refreshment (F&R) business in India by leveraging the mega trend of health and wellness, the company said.
The merger includes the totality of operations within GSK CH India, including a consignment selling contract to distribute GSK CH India’s Over-the-Counter and Oral Health products in India.
