Win-Win for both
In a move that will consolidate its position as India’s largest fast-moving consumer goods company, Hindustan Unilever (HUL) on Monday announced a merger with GlaxoSmithKline Consumer Healthcare Ltd (GSK CH India). As part of this steaming hot deal, health drinks including Boost, Horlicks and Maltova — the mainstays of GSK CH — will now move to the HUL stable. The transaction is an all equity merger with 4.39 shares of HUL being allotted for every share in GSK CH India. The deal values the total business at ₹31,700 crore.
“The acquisition is in-line with HUL’s strategy of acquiring a profitable business with strong portfolio of brands in the domestic market. The potential deal is a win-win for both the parties as the acquisition of strong brands in the HFD category would boost HUL’s food business by 900 bps to 27 per cent from the current 18 per cent of sales with sustainable profitable growth, while the deal is positive for shareholders of GSK Consumer Healthcare as they will get a better value under the share swap arrangement,” said Kaustubh Pawaskar of BNP Paribas.
Today , HUL made 52WK High
GlaxoSmithKline said it will continue to invest in growth opportunities in the pharma and vaccine businesses besides its OTC & Oral Health businesses. David Redfern, Chief Strategy Officer, GSK, said: “This transaction is very good for all the stakeholders. First, GSK Consumer Healthcare shareholders will be receiving a premium for their stake. Second, we have invested substantially in the business over the years. Today, we have access to 200 million people here in India with 170 servings per second of Horlicks. We believe we have got ideal partners who bring significant distribution capabilities right across India.”
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