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Unilever agrees £3.1 billion Horlicks deal with GSK

Staff Writer |
Unilever has struck a deal to buy Horlicks and other nutrition brands listed in India and Bangladesh from GlaxoSmithKline for roughly £3.1bn.

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Glaxo's 72.5%-owned subsidiary GSK Consumer Healthcare, known as GSK India, would be merged with Hindustan Unilever, in which parent Unilever owns 67.2%. Both companies are listed on India's National Stock Exchange and Bombay Stock Exchange in Mumbai.

As part of the estimated £3.1bn total transaction price, Unilever will pay around £0.57bn for GSK's 82% stake in its Bangladeshi business, which includes various brand rights for GSK's consumer healthcare nutrition activities in certain other territories.

GSK said its net proceeds from the sale of the GSK India and Bangladesh stakes was estimated to be around £2.4bn and that it would be left with a stake of 5.7% in the merged Indian entity, which it would sell down gradually.

The merger values GSK India at 317bn Indian rupees in total, or 7,540 rupees per share, a 15.4% premium to the share price at close of business on 26 March.

GSK chief executive Emma Walmsley said: "Horlicks has made a significant contribution to GSK and to the health of consumers across India for many decades and we believe Unilever is well placed to maximise its future potential. Proceeds from this transaction will be used to support the Group's strategic priorities, including investing in our pharmaceutical business."

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