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Unilever emerges as leading bidder for less than $4-bn Horlicks: Report

Some analysts considered the $4 billion valuation high considering the Indian market for so-called health drinks

Reuters  |  Hong Kong/Zurich 

Horlicks sale

has emerged as the leading bidder in a tight contest for GlaxoSmithKline PLC's Indian nutrition business, two people familiar with the situation told on Wednesday.

If it is able to clinch the deal, Unilever will trump fellow European Nestle SA, which according to an Indian media report earlier on Wednesday was close to buying and other GSK in

Unilever and GSK, which owns 72.5 percent of Indian business GlaxoSmithKline Consumer Healthcare Ltd, were in exclusive talks, reported on Tuesday, citing people familiar with the sales process.

The acquisition will strengthen Unilever's position in India, an emerging market whose growing population and rising wealth make it attractive in the long term for trying to offset weak growth in Western markets.

GSK's assets, which include the popular malt-based drinks and Boost, is likely to fetch less than $4 billion, said people close the deal, who declined to be identified as the information is confidential.

Earlier in the sale process, separate sources had told the assets could be valued at more than $4 billion.

Some analysts considered the $4 billion valuation high considering the Indian market for so-called health drinks - mostly dietary supplements or flavour enhancers typically drunk with milk - is seeing a slowdown in growth.

Urban Indian consumers are increasingly turning to healthier, less-sugary alternatives and natural products, analysts and industry sources said.

Last month, agreed to sell its popular Complan and Glucon-D, along with a some other brands and factories, to Indian and consumer company for 45.95 billion rupees ($648.6 million).

Still, Horlicks comfortably dominates the health-drinks market in and a big consumer company with deep pockets is likely to give it a fresh lease of life, analysts and industry sources said.

GSK is conducting a strategic review of its nutrition brands in and expects to conclude the process by the end of 2018, a for GSK India told

A for Hindustan Unilever Ltd, Unilever's Indian subsidiary, declined to comment when contacted by Reuters. A for said the company would not comment on "speculation".

Other bidders include Coca-Cola Co, which has been looking to expand in emerging markets, sources previously told Reuters.

First Published: Wed, November 28 2018. 15:39 IST
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