The deal has three parts:
- an all-equity merger of Hindustan Unilever with publicly listed GSK Consumer Healthcare India;
- the acquisition of an 82% stake in GSK Bangladesh; and
- the acquisition of certain other commercial operations and assets outside India.
In 2018, the GSK HFD portfolio delivered total turnover of €550m (£489.6m), primarily through the Horlicks and Boost brands. Almost 90% of that turnover is in India.
Unilever said the move was associated with its strategy of increasing its presence in health-food categories and in high-growth emerging markets.
GSK leads the Health Food Drinks category in India, with brands such as Horlicks and Boost, and a product portfolio supported by strong nutritional claims. Horlicks was originally introduced to India in the 1930s.
Horlicks products have been an everyday staple in south Asian households across generations. Over the past 15 years, the portfolio (and category) has grown at a double-digit rate. Despite this, the category still had more potential in the region and Unilever said it was well-placed to develop the market, given its reach and capabilities.
Unilever will also acquire GSK HFD commercial operations in 20 other predominantly Asian markets, plus intellectual property rights for a total consideration of €470m (£418.3m) in cash.
“The iconic Horlicks brand has a deep heritage, credibility and resonance around the world,” said Nitin Paranjpe, president, Foods & Refreshment, at Unilever. “The acquisition is transformative for our Foods & Refreshment business, allowing us to enter the Health Foods Drinks category, further strengthening our position in health and wellness.
“It is rare to be able to acquire brands with such leading market positions and fantastic consumer equity in one of the world’s most exciting and fast-growing markets. Improving the health and wellbeing of 1bn people by 2020 is a key pillar in our Unilever Sustainable Living Plan. Horlicks and Boost will add to our stable of purpose-driven brands that help consumers to get more out of their lives.”
Sanjiv Mehta, chairman and chief executive, Hindustan Unilever, said: “With this strategic merger of Hindustan Unilever and GSK Consumer Healthcare India, we will be expanding our portfolio through great brands into a new category catering to the nutritional needs of our consumers.
“The turnover of our Foods & Refreshment business will now exceed 100bn Rupees [£1.1bn] and we will become one of the largest F&R businesses in the country.”
The total consideration for the transaction is €4.6bn, of which Unilever's implied contribution totals €3.3bn.