HUL to merge GSK Consumer Healthcare with itself; deal includes Horlicks

Hindustan Unilever Ltd (HUL) has said in its filing on December 3, 2018 that its Board of Directors has approved “a scheme of amalgamation between the company and GlaxoSmithKline Consumer Healthcare (GSK CH India) subject to obtaining requisite approvals from statutory authorities and shareholders”. 

In its investor presentation, made during its investor meet in Mumbai on December 3, HUL stated that GSK CH India will merge with it in an all equity merger. The transaction is expected to be completed in one year, subject to shareholders’ and regulatory approvals. 

Horlicks brand in India and international markets (Bangladesh and 20 other markets, predominantly in Asia), currently owned by GSK Plc (including Group Companies) is being acquired by Unilever. Brands owned by GSK CH India (Boost, Viva and Maltova) will be retained by the merged entity. 

GSK CH India is valued at Rs 317 billion (equity value). The share swap ratio will be 4.39 HUL shares for every 1 share held in GSK CH India. With the allocation of new HUL shares Unilever’s shareholding in the merged entity will dip to .9 per cent vis-à-vis 67.2 per cent prior to the merger. According to the investor presentation, GSK Plc (including Group Companies) will own 5.7 per cent of the merged entity. 

HUL will distribute GSK’s Over-the-Counter and Oral Health products under a consignment selling agreement (5 years).