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Unilever to swallow GSK's Indian Horlicks business

Reuters  |  LONDON 

(Reuters) - is to buy GlaxoSmithKline's Indian nutrition for around $3.8 billion, boosting the group's position in a key emerging market.

The deal, announced on Monday, marks a further step by drugmaker GSK to streamline its and follows a competitive auction in which saw off rival Nestle, as well as earlier interest from

The transaction covers GSK's food and drinks portfolio in India, and 20 other predominantly Asian markets. The main asset being sold is GSK's 72.5 percent stake in Indian-listed Consumer Healthcare.

said the 3.3 billion euros ($3.75 billion) it was paying would be paid in cash and shares in its subsidiary in India, (HUL).

GSK said its net proceeds from the deal, after tax and hedging costs, were expected to be around 2.4 billion pounds ($3.1 billion).

Following the closure of the deal, GSK will own approximately 5.7 percent of HUL, which the British drugmaker intends to sell down in tranches.

The price being paid for the GSK business, which includes the popular malt-based drinks and Boost, is broadly in line with expectations. People familiar with the process had told it was likely to be for less than $4 billion.

comfortably dominates the health-drinks market in and Unilever is expected to try and give it a fresh lease of life, following a slowdown in sales growth in recent years.

GSK's decision to sell the follows its $13 billion acquisition of Novartis's stake in the two groups' consumer joint venture earlier this year. GSK said at the time that selling Horlicks could support the funding of the buyout.

($1 = 0.8805 euros)

($1 = 0.7814 pounds)

(Reporting by Ben Hirschler and Noor Zainab Hussain in Bengaluru; Editing by Sai Sachin Ravikumar/Keith Weir)

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

First Published: Mon, December 03 2018. 14:54 IST