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Hindustan Unilever, GSK Consumer advance after board approve merger

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Shares of and Consumer Healthcare rose by 0.76% to 1.31% at 14:30 IST on BSE after Hindustan Unilever's board approved merger of Consumer Healthcare with itself.

Meanwhile, the was down 31.94 points, or 0.09% to 36,162.36.

was up 0.76% at Rs 1767.

Consumer Healthcare was up 1.31% at Rs 7365.

The board of directors of (HUL) today, 3 December 2018, approved a scheme of amalgamation between the company and Consumer Healthcare (CH India) subject to obtaining requisite approvals from statutory authorities and shareholders. HUL has reached a definite agreement with CH in this regard. The transaction is an all equity merger with 4.39 shares of HUL being allotted for every share in GSK CH This transaction values the total at Rs 31,700 crore.

Following the issue of new HUL shares, Unilever's holding in HUL will be diluted from 67.2% to 61.9%. The merger includes the totality of operations within GSK CH India, including a consignment selling contract to distribute GSK CH India's over-the-counter and oral products in The transaction is expected to be completed in one year subject to regulatory and shareholder approvals.

The acquisition is in line with the Hindustan Unilever strategy to build a sustainable and profitable foods and refreshment (F&R) in India by leveraging the mega trend of and wellness. GSK CH India is the in the food drinks (HFD) category, with iconic brands such as and Boost, and a product portfolio supported by strong nutritional claims. This portfolio has a long history in India with having originally been introduced in the 1930s. products have been an everyday staple in households across generations.

Sanjiv Mehta, chairman and managing director, HUL said, "With this proposed strategic merger with GSK CH India, we will be expanding our portfolio with great brands into a new category catering to the nutritional needs of our consumers. I am confident that this merger will create significant shareholder value through both revenue growth and cost synergies. The turnover of our F&R will exceed Rs.100 bn 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."

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, December 03 2018. 14:28 IST