Deal with GSK Consumer Healthcare earnings accretive for Hindustan Unilever

Hindustan Unilever's (HUL's) merger with GlaxoSmithKline Consumer Healthcare (GSKCH) is not only attractive for the latter's shareholders, given the share swap, but also accretive for HUL in the medium term. For every share of GSKCH, shareholders of the company will get 4.39 shares of HUL. Not surprising then, stocks of both the companies gained around 4 per cent, each, on Monday.

The deal should help HUL expand its food and refreshment (F&R) segment, given the fact that GSKCH is a market leader in health food drinks (HFD), with products such as Horlicks and Boost.

Horlicks and Boost have market shares