HUL-GlaxoSmithKline merger leads to Rs 31,700 cr entity

The transaction is an all equity merger with 4.39 shares of HUL being allotted for every share in GlaxoSmithKline Consumer Healthcare India

FMCG major HUL on Monday said its board has approved the merger with GlaxoSmithKline Consumer Healthcare (GSKCH India) through an all-equity deal, valuing the total business of the latter at Rs 31,700 crore.

The transaction is an all equity merger with 4.39 shares of HUL being allotted for every share in GSKCH India, which sells consumer healthcare products, including popular drink brand Horlicks.

"HUL has reached a definite agreement with GSKCH India in this regard," the company said in a statement.

Commenting on the development, HUL chairman and managing director Sanjiv Mehta, said, “With this proposed strategic merger with GSKCH India, we will be expanding our portfolio with great brands into a new category catering to the nutritional needs of our consumers."

Post the acquisition, he said the turnover of the company's Foods and Refreshment (F&R) business will exceed Rs 10,000 crore.

"We will become one of the largest F&R businesses in the country," Mehta added.

The GSKCH India business delivered total turnover of around Rs 4.200 crore in the year ended March 2018, primarily through its Horlicks and Boost brands, the statement said.

The merger of GSK CH India with HUL will be on a basis of an exchange ratio of 4.39 HUL shares for each GSK CH India Share, implying a total equity value of Rs 31,700 crore for 100 per cent of GSK CH India, it said.

Following the issue of new HUL shares, Unilevers’ holding in HUL will be diluted from 67.2 per cent to 61.9 per cent, it added.

The merger includes the totality of operations within GSK CH ndia, including a consignment selling contract to distribute GSK CH India's over-the-counter and oral health products in India.

Photograph: GSK via Twitter