Hindustan Unilever Limited (HUL), the country’s biggest consumer goods firm, said it has acquired Horlicks brand from GSK Plc for Rs 3045 crore for the Indian market, exercising its option from the original agreement made between its parent Unilever and GSK. As per the deal announced in December 2018, the Horlicks brand, owned by GSK Plc, was acquired by parent Unilever and HUL would have to pay royalty for its use in India. HUL said the latest deal for India has enabled the company to utilize cash on its balance sheet, create value for shareholders and helped them drive better salience in a local context.
HUL also said it has now completed the Rs31,700 crore merger with GlaxoSmithKline Consumer Healthcare, which will help them unlock significant synergies both in terms of revenue and costs. The other GSK brands – Boost, Maltova and Viva has come to HUL’s portfolio as part of the merger. “The merger gives us a unique opportunity to live our purpose and serve India where Nutrition related challenges form the largest causes of disease– malnutrition and micronutrient deficiency – and aligns well with the Government’s ambitious Swasth Bharat and Poshan Abhiyan programs,” Sanjiv Mehta, Chairman and Managing Director, Hindustan Unilever said.
The merger will significantly bolster HUL’s food and refreshments portfolio, which accounts for about a fifth to its overall sales despite marquee brands such as Knorr soup, Kissan jam, Bru coffee and Lipton tea. While HUL leads the market in segments such as soups, jams and tea, the sizes of these categories are significantly smaller than most mass segments in the foods space. Horlicks, that controls over half the malted beverages category, will help HUL’s focus to build a profitable and sustainable nutrition business in India, added the statement.
