Unilever agreed to acquire GlaxoSmithKline Plc’s Indian consumer business, including malted milk drink Horlicks, for 3.3 billion euros ($3.8 billion) to push up its footprint in one among the world’s fastest-growing major economies.
It’s one of the Anglo-Dutch company’s largest acquisitions under departing Chief executive officer Paul Polman, who in January is handing over to personal-care head Alan Jope. it is also the primary major deal since a concept to combine the company’s headquarters within the netherlands folded under venture capitalist pressure in October.
The dealings strengthen Unilever’s presence within the rising markets that account for regarding two-thirds of its revenue. The Dove soap maker will use money and shares of its Indian subsidiary to take control of a brand new venture that has Glaxo’s listed entity within the country, where Unilever has been marketing products since the late nineteenth century.
If you examine Unilever’s foods portfolio in India they have been seriously lagging for several years currently, particularly versus the world Unilever portfolio,” said Anand Shah, an analyst at Axis Capital Ltd. in Mumbai. “It’s a bid to expand the whole food pie for themselves.”
Glaxo rose 1.4 % in early business in London. Unilever rose 0.6 % in Dutch capital.
India s malt-based hot drinks section is calculable to be worth Rs. 7,870 crore ($1.1 billion), according to Euromonitor International. in addition to Horlicks, Unilever will gain the Boost brand, another leader within the segment. The deal includes 566 million pounds ($724 million) for an 82 % stake in Glaxo’s Bangladesh unit and other connected consumer health brands outside India.
Glaxo could use the proceeds to assist fund its buyout of Novartis AG’s stake in their consumer-health joint venture. Chief executive officer Emma Walmsley has been sculpting the company’s portfolio, notably in its drug company unit, where she’s focused on drug candidates that are possibly to achieve success.
Malt-based drinks are popular in India, where they are seen as a nutritional supplement. Unilever is betting on a worldwide “health and wellness megatrend,” in step with an capitalist presentation. However the segment is anticipated to grow more slowly than within the past, as consumers switch to less sugary drinks.
Unilever can use its more intensive distribution network to bring the drinks to more customers, said Sanjiv Mehta, chairman of Hindustan Unilever Ltd., the Anglo-Dutch company’s India subsidiary.
Photo credits: The Financial Express