The deal represents India’s largest consumer goods transaction.
Hindustan Unilever Ltd (HUL), the Indian subsidiary of consumer good giant Unilever, will acquire GlaxoSmithKline’s (GSK’s) key consumer nutrition brands in India, in an all-stock deal valued at $4.5 billion.
The deal involves the exchange of 4.39 HUL shares per share of the GSK subsidiary. Unilever beat out other bids from Nestle, ITC and Coca Cola — this is reported to be the largest consumer goods transaction ever to take place in India.
HUL, which already owns brands such as Lipton, Kissan, Knorr and Magnum, will merge GSK’s consumer healthcare operations, including health drinks Horlicks, Maltova and Boost, into its own operations. HUL will also acquire GSK’s 82% holding in its Bangladesh unit and branding rights to products in certain other markets. HUL will also distribute GSK’s over-the-counter and oral healthcare products like Crocin and Sensodyne for a period of five years. GSK, meanwhile, will receive a 5.7% stake in HUL.
Once the transaction is finalized in 2019, HUL will become India’s largest publicly listed food and refreshments company. GSK is expected at that time to sell its stake for a sizeable profit. HUL plans to upgrade the GSK brands and expand their distribution, particularly into rural areas, using its eight million outlets.