Unilever Agrees to Buy GlaxoSmithKline Health Food Drinks Portfolio In India

By Ian Walker and Oliver Griffin

Unilever PLC (ULVR.LN) said Monday that it has agreed to buy GlaxoSmithKline PLC's (GSK.LN) health food drinks portfolio in India--which houses the Horlicks brand, a malted-milk drink--for 3.3 billion euros ($3.73 billion).

The Anglo-Dutch consumer goods company said the deal consists of three parts, including an all-equity merger of Hindustan Unilever Ltd. with the publicly-listed GSK Consumer Healthcare India.

The deal ends a months-long auction process that also drew interest from Nestle SA (NESN.EB) and Coca-Cola Co. (KO), which were eager to bolster their presence in one of the world's most promising consumer markets.

As well as the all-share merger between the two subsidiaries, Unilever said it will acquire an 82% stake in GlaxoSmithKline's business in Bangladesh for EUR169 million. It will also acquire GlaxoSmithKline's commercial operations in 20 other predominantly Asian markets, and the associated intellectual property rights, for EUR470 million.

Horlicks is popular in India and mainly sold through GlaxoSmithKline Consumer Healthcare Ltd., the big U.K.-based drug maker's majority-owned Indian unit.

Unilever said that the total consideration for the transaction is EUR 4.6 billion, of which its implied contribution totals EUR3.3 billion.

Unilever, which already houses Ben & Jerry's ice cream, Dove soap and Lipton tea among its portfolio said the transaction is aligned with its strategy of increasing its presence in health-food categories and in high-growth emerging markets.

GlaxoSmithKline plans to use the proceeds to support its own strategic priorities and reduce its debt. The transaction is expected to have no effect on earnings, GlaxoSmithKline said.

Write to Ian Walker and Oliver Griffin at [e-mail]; @IanWalk40289749 and [e-mail]; @OliGGriffin

(END) Dow Jones Newswires

December 03, 2018 04:10 ET (09:10 GMT)

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