Business

HUL to merge with GSK Consumer Health Care

HorlicksHorlicks
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HUL to merge with GSK Consumer Health Care, Hindustan
Unilever, India's biggest pure-play consumer goods firm said it will merge
GlaxoSmithKline Consumer. the popular Horlicks and other brands. HUL will get
to acquire GSK Consumer’s Horlicks and other brands for as much as EUR 3.3
billion.

“It was too hard to resist, given the formidable presence of
HUL in India and the accompanying market capitalization of over ₹3.95 trillion,” said the first person cited above. “In comparison,
the others were offering cash and, in some cases, a mix of cash and stock, but
the shareholders felt that the future of the business is most secure with HUL.”

Hindustan Unilever said the 3.3 billion euros ($3.75
billion) it was paying would be paid in cash and shares in its subsidiary in
India, Hindustan Unilever Limited (HUL). GlaxoSmithKline Consumer Healthcare
and HUL have agreed to a share exchange ratio of 4.39 shares of HUL for every
one share of GSK Consumer India, the two companies said in separate filings
with the stock exchanges.

“Given the constraints, it becomes very, very
difficult to fund such a transaction, especially one with a size of ₹31,000 crore, which
is a massive deal. You don’t see such massive cash funding in the Indian
market
,” this person said. “So, you
would have to fund from outside India.”

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