New Delhi: FMCG major Hindustan Unilever on Wednesday announced the completion of GlaxoSmithKline Consumer Healthcare Ltd's merger (GSKCH) with itself.
The company has received all the necessary regulator approvals along with the National Company Law Tribunal for the merger of GSKCH into the company, HUL said in a statement.
In addition, the board of HUL also approved the acquisition of popular health drink brand Horlicks from GSK for a consideration of Euro 375.6 million (Rs 3,045 crore), exercising the option available in the original agreement between its parent firm Unilever and GSK.
This will enable HUL to utilise cash on its balance sheet and create value for shareholders. In addition, it will enable HUL to drive better salience in a local context. The other brands which were under the ownership of GSKCH like Boost, Maltova and Viva come to HUL's brand portfolio by virtue of the merger," the statement said.
On 3 December, 2018 HUL had announced the merger of GSKCH, which was subject to obtaining necessary approvals.
"This is one of the largest deals in the FMCG sector in recent times and will lead to significant value creation for all stakeholders," HUL said.
The deal would unlock opportunity for HUL in Health Food Drinks (HFD) market as GSKCH was the market leader in the segment, with brands as Horlicks and Boost in its portfolio.
"Brands such as Horlicks and Boost are iconic, and we are excited to have them in the Hindustan Unilever fold. The merger gives us a unique opportunity to live our purpose and serve India where Nutrition-related challenges form the largest causes of disease - Malnutrition and Micronutrient deficiency - and aligns well with the Government's ambitious Swasth Bharat and Poshan Abhiyan programs. I am delighted to welcome the 3,500 strong Nutrition Team to the HUL family."
"Both organizations have common values coming from a lineage of respected parent companies and a shared heritage of building iconic trusted brands," HUL CMD Sanjiv Mehta said.
Horlicks has a volume share of close to 50 percent in the HFD market.
"This merger will bolster HUL's focus to build a profitable and sustainable Nutrition business in India," the FMCG firm said adding "the nutrition and health drinks category remains under-penetrated in India and HUL is well-positioned to further develop the market given the extent of its reach and capabilities".
HUL will be partnering with GSK through consignment selling arrangement to distribute brands of the GSK Consumer Healthcare family in India.
"This partnership, with world-class brands from GSK like Eno, Crocin, Sensodyne etc and HUL's distribution strength can unlock value for GSK and build further Hindustan Unilever's go-to-market capabilities," it added.
On 3 December, 2018, Anglo-Dutch FMCG giant Unilever announced the acquisition of health food portfolio, including popular brands Horlicks and Boost, from GSKCH India and over 20 other markets for 3.1 billion pounds (about Rs 27,750 crore).
According to the deal, Unilever''s Indian arm HUL acquired GSKCH India via an all-equity merger, valuing the total business of the latter at Rs 31,700 crore.
Shares of Hindustan Unilever Limited were trading at Rs 2,188 on the BSE, down 4.79 percent from its previous close.
Updated Date: Apr 01, 2020 16:36:15 IST