Anglo-Dutch company Unilever on Monday announced it will buy GlaxoSmithKline Consumer Healthcare, or GSK India, which makes popular Indian health drinks such as Horlicks and Boost. The deal values the total business of GSK India at Rs 31,700 crore.
Shares of GSK India and Unilever’s India arm, Hindustan Unilever, rose more than 4% in Indian stock markets after the announcement. The deal will involve the merger of the two Indian firms, and is likely to be closed by the end of 2019, said GSK India.
Hindustan Unilever will distribute GSK’s over-the-counter and oral health brands for an initial period of five years after the deal, Reuters reported. GSK will own about 5.7% of Hindustan Unilever. The transaction is an all-equity merger, with 4.39 shares of Hindustan Unilever to be allotted for every share in GSK India.
Hindustan Unilever Chairman and Managing Director Sanjiv Mehta said the turnover of the company’s foods and refreshment business will cross Rs 10,000 crore after the merger, according to PTI.
GSK will also sell its 82% stake in GlaxoSmithKline Bangladesh Limited to Unilever.
“Horlicks has made a significant contribution to GSK and to the health of consumers across India for many decades and we believe Unilever is well placed to maximise its future potential,” GlaxoSmithKline Chief Executive Officer Emma Walmsley said.