GlaxoSmithKline Consumer Healthcare Thursday confirmed that "consideration is being given to a potential transaction" amid reports that Unilever Plc has emerged as the top contender to acquire the nutrition business of UK-based GSK Plc.
Hindustan Unilever, the Indian arm of Unilever, confirmed that the company was in the race to acquire GlaxoSmithKline Plc's consumer healthcare nutrition products, including the popular drink Horlicks, but said it was bound by "confidentiality obligations" from disclosing details at this point of time.
In March this year, GlaxoSmithKline Plc (GSK) had announced a strategic review of Horlicks and its other consumer healthcare nutrition products following its acquisition of 36.5 per cent stake in the consumer healthcare business of Novartis for GBP 9.2 billion.
GSK is considering to sell Horlicks and other nutrition brands as part of plans to fund the acquisition.
The majority of Horlicks and other GSK nutrition products sales are generated in India by GlaxoSmithKline Consumer Healthcare (GSKCH).
"The company can confirm that consideration is being given to a potential transaction, which includes a merger of the company," GSKCH said in a clarification to BSE.
It, however, did not disclose details and the identity of potential buyer although reports suggested that Anglo-Dutch consumer goods firm Unilever PLC has emerged as the top contender for the nutrition business of GlaxoSmithKline.
In a separate clarification to BSE over the reports, Hindustan Unilever said, "With reference to this particular case, we wish to state that we are bound by the confidentiality obligations at this point in time."
The company further said,"...considering confidentiality norms, it will not be correct for us to provide any further details at this stage."
GSKCH also said, "There can be no assurance that a transaction will result from the review process nor has any decision on the matter been made by the company."
The Financial Times had reported that Unilever has beaten rival bid from Nestle, which was looking to build on its market-leading position in powdered hot drinks, where it already sells Milo and Nesquik.
If the deal is sealed in favour of Unilever, it would further consolidate the position of its Indian arm Hindustan Unilever, which is expanding its portfolio in the food and beverages segment.
Earlier, Atlanta-based cola major CocaCola Co was also in the race to acquire the malt-based health drink Horlicks from GSK.
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