Mumbai: In its biggest step in deals space yet, Hindustan Unilever on Monday said that it will merge with GSK’s healthcare business. The transaction values the total business at ₹31,700 crore. The merger includes the totality of operations within GSK Consumer Healthcare India, including a consignment selling contract to distribute GSK Consumer’s over-the-counter and oral health products in India, the company said in a statement.
The merger of GSK Consumer with HUL will be on a basis of a share swap ratio of 4.39 HUL shares for each GSK Consumer share, implying a total equity value of ₹31,700 crore for 100% of GSK Consumer. Following the issue of new HUL shares, Unilever‘s holding in HUL will be diluted from 67.2% to 61.9%, the company said.
“With this proposed strategic merger with GSK Consumer Healthcare India, we will be expanding our portfolio with great brands into a new category catering to the nutritional needs of our consumers. I’m confident that this merger will create significant shareholder value through both revenue growth and cost synergies,” HUL CMD Sanjiv Mehta said in a statement.
“The turnover of our F&R (food and refreshment) business will exceed ₹10,000 crore and we will become one of the largest F&R businesses in the country. We look forward to welcoming new brands and great talent into the Unilever and HUL family, once the transaction is complete,” Mehta added.
GSK Consumer Healthcare India is the market leader in the health food category, 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.