The merger of HUL and GSK for a ₹317-bn deal

Hindustan Unilever (HUL) announced its merger with GlaxoSmithKline
(GSK) Consumer Healthcare for a deal of ₹317 billion on Monday 3rd December 2018.
  • It is one of the largest deals on the consumer goods space in India so far.
  • The main idea for the merger was to acquire Horlicks and other nutritious health food drinks from GSK in over 20 markets and to compete and be ahead of rivals or market players, in over 20 markets for € 3.1billion.
Major Highlights of the deal are:-
  • € 3.1billion – Expenditure in acquiring Horlicks and other Health food products in over 20 markets.
  • €150 million -In cash for GSK’s 82% in Bangladesh unit.
  • € 416 million- In cash for brand rights and operations in other markets
  • 5.7 % of GSK stake.
  • ₹ 65 billion sizes of HUL’s food and refreshment business in FY18.
  • Transaction in India is 7 times the sales in Fy18 (₹ 42bn) of GSK consumer.
  • Deal includes Horlicks, Boost, Maltova, and Viva.
  • HUL will even distribute Eno, Crocin, Iodex, and Sensodyne for the next 5 years.
  • HUL is also going to hire GSK’s Employees following the merger.
  • Fundamentally HUL is looking into Nutritious Segment too as consumers these days are into Health Conscious approach.
  • Also if you look at the above two statements, we can understand that as the world is evolving towards a healthy environment, and HUL is also catering to the segment in the upcoming years ahead.
  • They are going to launch new variants and extend Brand across pricing and put a pressure on its rival – Nestle.
It is predicted that HUL will be into the Pharmacy channel in the upcoming years as said by the HUL's Chairman and MD Sanjiv Mehta “This is a transformative deal, which will give us a meaningful presence in health and wellness. With the proposed merger, we will be expanding our portfolio with brands that cater to the nutritious needs of consumers.”

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