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The merger values GSK Consumer Healthcare at nearly Rs 32,000 crore and its shareholders will get 4.39 shares of HUL for each of their share.
Nearly 15 months after announcing the deal to merge GlaxoSmithKline Consumer Healthcare with itself, Hindustan Unilever Limited has successfully completed the merger. The last set of approvals came from the Mumbai and Chandigarh bench of the National Company Law Tribunal in February 2020.
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The merger values GSK Consumer Healthcare at nearly Rs 32,000 crore and its shareholders will get 4.39 shares of HUL for each of their share. The record date for issuance of shares of HUL to GSK Consumer shareholders is April 17, 2020.
This deal gives HUL access to Horlicks, Boost and Maltova malted drinks brands and OTC brands such as Sensodyne, Eno and Crocin.
"Board of Directors of HUL today approved HUL acquiring the Horlicks Brand for India from GSK for a consideration of Euro 375.6 million (INR 3045 Cr), exercising the option available in the original agreement made between Unilever and GSK," said HUL in a press release.
This merger is in line with HUL's strategy to grow its Foods and Refreshments business in India. Horlicks has a volume share of 50 percent in the HFD category and this deal will help HUL tap into this under penetrated market.
It is also betting big on chemist and pharmacy channels to sell the other OTC brands in the portfolio like Eno, Crocin and Sensodyne. "HUL will be partnering with GSK (via a 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," said HUL in a press release.
HUL also recently announced the acquisition of feminine Hygiene brand, VWash, from Glenmark. This would also strengthen its OTC portfolio that can be made available in pharmacy and chemist channels.
GSK Consumer Healthcare's business delivered total turnover of around Rs 45 billion in the year ended March 2019, primarily through its Horlicks and Boost brands. Following the issue of new HUL shares, Unilever's holding in HUL will be diluted from 67.2 percent to 61.9 percent.
“Brands such as Horlicks and Boost are iconic, and we are excited to have them in the Hindustan Unilever fold. The merger gives us a unique opportunity to live our purpose and serve India where nutrition related challenges form the largest causes of disease – malnutrition and micronutrient deficiency - and aligns well with the government’s ambitious Swasth Bharat and Poshan Abhiyan programs. I am delighted to welcome the 3500 – strong Nutrition team to the HUL family," said Sanjiv Mehta, Chairman and Managing Director, Hindustan Unilever.