Unilever emerges as leading bidder for GSK’s Indian Horlicks ops

  • Business
  • Thursday, 29 Nov 2018

Traffic and people pass by the front of the Unilever building in central London, Britain. - Reuters filepic

HONG KONG: Unilever PLC has emerged as the leading bidder in a tight contest for GlaxoSmithKline PLC’s Indian Horlicks nutrition business, sources told Reuters.

If it is able to clinch the deal, Unilever will trump fellow European consumer giant Nestle SA, which according to an Indian media report earlier yesterday was close to buying Horlicks and other GSK consumer healthcare assets in India.

Unilever and GSK, which owns 72.5% of Indian business GlaxoSmithKline Consumer Healthcare Ltd, were in exclusive talks, the Financial Times reported on Tuesday, citing sources.

The acquisition will strengthen Unilever’s position in India, an emerging market whose growing population and rising wealth make it attractive in the long term for companies trying to offset weak growth in Western markets.

GSK’s assets, which include the popular malt-based drinks Horlicks and Boost, is likely to fetch less than US$4bil, said sources who declined to be identified as the information is confidential.

Earlier in the sale process, separate sources had told Reuters the assets could be valued at more than US$4bil.

Some analysts considered the US$4bil valuation high considering the Indian market for so-called health drinks – mostly dietary supplements or flavour enhancers typically drunk with milk – is seeing a slowdown in growth.

Urban Indian consumers are increasingly turning to healthier, less-sugary alternatives and natural products, analysts and industry sources said.

Last month, Kraft Heinz Co agreed to sell its popular health-drink brands Complan and Glucon-D, along with a some other brands and factories, to Indian pharmaceuticals and consumer company Zydus Wellness Ltd for 45.95 billion rupees (US$648.6mil).

Still, Horlicks comfortably dominates the health-drinks market in India and a big consumer company with deep pockets is likely to give it a fresh lease of life, analysts and industry sources said.

GSK is conducting a strategic review of its nutrition brands in India and expected to conclude the process by the end of 2018, a spokeswoman for GSK India told Reuters. — Reuters

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