Unilever announced it will acquire GSK Korlicks, a health food and drinks portfolio from India, Bangladesh and other 20 predominant Asian markets, in a transaction worth EUR 3.3 billion in cash and shares.
The transaction consists of three elements: an all-equity merger of Hindustan Unilever Ltd with the publicly listed GSK Consumer Healthcare India, an acquisition of 82 percent stake in GSK Bangladesh Limited and an acquisition of certain other commercial operations and assets outside India.
Unilever’s share of the total consideration is EUR 3.3 billion using a combination of cash and shares in its listed subsidiaries in Indian, Hindustan Unilever Limited. In 2018, the GSK HFD portfolio delivered a total turnover of EUR 550 million, primarly through Horlicks and Boost brands. Almost 90 percent of the turnover is in India.
GSK HFD is the undisputed leader in the Health Food Drinks category in India, with iconic brands such as Horlicks and Boost, and a product portfolio supported by strong nutritional claims. This portfolio has a long history in India with Horlicks having originally been introduced in the 1930s. Horlicks products have been an everyday staple in South Asian households across generations. Over the last 15 years, the portfolio (and category) has grown at a double-digit rate. Despite this, the category still remains under-penetrated in India.
“We are delighted to be acquiring the GSK Health Food Drinks portfolio. The iconic Horlicks brand has a deep heritage, credibility and resonance around the world. The acquisition is transformative for our Foods and 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 1 billion 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,” said Nitin Paranje, president of Food & Refreshment at Unilever.
The total value for the transaction is EUR 4.6 billion, of which Unilever’s contribution through cash and the issue of shares of HUL, its listed subsidiary in India, totals EUR 3.3 billion. The transaction is subject to customary regulatory and shareholder approvals, with expected completion in 12 months.