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GlaxoSmithKline has entered into exclusive negotiations to sell its nutrition business to Unilever, ending a multi-month auction process for the $ 4 billion unit that includes the award-winning malt beverage brand Horlicks, very popular in India.
The Anglo-Dutch consumer society beat a competing offer from Nestlé's Swiss food and beverage group, which sought to strengthen its leading position in the hot beverage powder market, where it already sells Milo and Nesquik , said specialists in the sales process.
Coca-Cola was also selected to participate in the final stage of the company's auction, which began in September, but its interest has cooled, added one person.
The Unilever bid price could not be determined, but GSK's Indian company is listed on the Bombay Stock Exchange for a market value of $ 4.2 billion. This would mean that GSK's 72.5% stake in the company represents approximately $ 3 billion with no acquisition premium. The agreement should also include GSK's activities in Bangladesh.
If the agreement is finalized, Unilever would strengthen its position in India, its main emerging market.
Unilever's recent acquisitions were aimed at strengthening its division of household and personal care products, and not so much on food and beverages, but that does not prevent a medium-sized acquisition in the sector food in a key emerging market, writes Bernstein Research Wood in a note published in October
GSK declined to comment. Unilever could not be contacted immediately for a comment.
Marketed in Asia to boost children's diets, the Horlicks product line is ideal for global consumer goods companies looking for badets that meet the demand for healthy, convenient foods. 19659009] Recommended
Analysts estimate that this badet represents more than 90% of its sales in India, which is a rare chance to acquire a product in strong growth in an emerging market where consumers "Regimes change as income per capita increases. The Indian market is only one-fifth the size of China, while its population is almost as large, suggesting enormous potential.
GSK sells this company because its priorities have changed under the authority of Emma Walmsley, General Manager. GSK's decision to sell was triggered by Novartis 'acquisition of Novartis' interest in the group's "Consumer Health" joint venture after the Swiss drug manufacturer decided to withdraw.
The vast majority of Horlicks sales come from the company's Indian subsidiary, GlaxoSmithKline Consumer Healthcare. Nutritional products sold about 550 million pounds in 2017.
Last year, GSK sold its Horlicks franchise in the UK, but the product continues to occupy a special place in Indian life, where it is considered a nutritional supplement beneficial for children. far from its image in the UK as a sleeping drink, widely consumed by the elderly. It holds approximately 44% of the malt nutritional beverages market in India.
