GSK to sell Bangladesh's stake to Unilever

Henrietta Brewer
December 5, 2018

The move comes after it emerged last week that the FTSE 100 drugmaker had entered into exclusive negotiations with the Anglo-Dutch consumer goods giant for the business, which includes the Horlicks malted drink brand popular in India.

Synergy benefits will start accruing from FY21 Expects one-time dividend in FY21, given that Glaxo has cash of 38 billion rupees ($539 million) on its books and Hindustan Unilever has 80 percent dividend payout Maintains hold, PT 1,880 rupee.

The Health Food Drinks portfolio, which is centered in India and contains malted milk hot drink Horlicks and chocolate-flavoured malt-based food drink Boost, has been growing at a double-digit rate over the past 15 years. Nearly 90% of this is in India.

Since being introduced in the 1930s, Horlicks has built up a strong following in India. Horlicks products have been an everyday staple in south Asian households for generations.

'Unilever is well positioned to further develop the market given its reach and capabilities, ' it added.

Nestle and CocaCola were also in the race to acquire GSK's health food portfolio.

"We will become one of the largest F&R businesses in the country", Mehta added. "I'm confident that this merger will create significant shareholder value through both revenue growth and cost synergies", HUL CMD Sanjiv Mehta said in a statement.

The proposed transaction involves the merger of GSK India with HUL, a public company listed on NSE and BSE, following which GSK will own approximately 5.7 per cent of HUL.

The logo for Unilever appears above a trading post on the floor of the New York Stock Exchange.

According to a statement by GSK earlier, the company had said that it is looking to increase focus on OTC and oral health categories.

As part of the deal, GSK India will merge with Unilever's Indian subsidiary, Hindustan Unilever. GSK Consumer India is valued at Rs 31,700 crore as per the deal and the detailed evaluation will be completed in 12 months.

The deal entails multiple transactions. The transaction will also include the acquisition of Horlicks brand by the parent Unilever from GSK. "The transaction is subject to the satisfaction or waiver of the conditions precedents in the SPA (including necessary regulatory formalities and approval in accordance with the laws of Bangladesh)".

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