HUL announces completion of GSK merger with company


HUL announces completion of GSK merger with company

Hindustan Unilever (HUL) has announced the completion of GlaxoSmithKline Consumer Healthcare Ltd merger (GSKCH) with itself. The stock  is currently trading at Rs2,176, down by Rs122.15 or 5.32% from its previous closing of Rs2,298.15 on the BSE.

The company has received all the necessary regulatory approvals along with the National Company Law Tribunal (NCLT) for the merger of GSKCH into the company, HUL said in a statement in the regulatory filing.

In addition, the HUL board also approved the acquisition of popular health drink brand Horlicks from GSK for a consideration of Euro 375.6 mn (Rs3,045cr), exercising the option available in the original agreement between its parent firm Unilever and GSK.

"This will enable HUL to utilise cash on its balance sheet and create value for shareholders. In addition, it will enable HUL to drive better salience in a local context. The other brands which were under the ownership of GSKCH like Boost, Maltova and Viva come to HUL’s brand portfolio by virtue of the merger," the company said.

On December 3, 2018, HUL had announced the merger of GSKCH, which was subject to obtaining necessary approvals.

"This is one of the largest deals in the FMCG sector in recent times and will lead to significant value creation for all stakeholders," HUL said in the filing.

The deal would unlock opportunity for HUL in Health Food Drinks (HFD) market as GSKCH was the market leader in the segment, with brands as Horlicks and Boost in its portfolio.

HUL will be partnering with GSK through consignment selling arrangement to distribute brands of the GSK Consumer Healthcare family in India.

"This partnership, with world-class brands from GSK like Eno, Crocin, Sensodyne etc and HUL’s distribution strength can unlock value for GSK and build further Hindustan Unilever’s go-to-market capabilities," it added.

Sanjiv Mehta Chairman and Managing Director, HUL said, "both organizations have common values coming from a lineage of respected parent companies and a shared heritage of building iconic trusted brands.”

"This merger will bolster HUL’s focus to build a profitable and sustainable Nutrition business in India," the FMCG firm said adding "the nutrition and health drinks category remains under-penetrated in India and HUL is well-positioned to further develop the market given the extent of its reach and capabilities."

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