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Hindustan Unilever buys GSK’s Indian Horlicks business for ₹31,700 crore

India’s largest consumer goods company Hindustan Unilever Ltd (HUL) is set to become the country’s largest listed foods company, powered by a ₹31,700 crore all-stock acquisition of GlaxoSmithKline Consumer Healthcare Ltd that will give the local unit of Unilever brands such as Horlicks, Boost and Viva.

The move would also help HUL make its most ambitious foray into the health and wellness space, chairman Sanjiv Mehta said. In addition, HUL will enter into a five-year contract to distribute GSK Consumer’s over-the-counter and oral health products. The market for health food drinks in India is estimated at ₹7,000 crore, according to HUL, with Horlicks accounting for around 60% of volume.

The merger is subject to approvals from statutory authorities and shareholders. This transaction values GSK Consumer at ₹31,700 crore. HUL will issue 4.39 of its own shares for every share of GSK Consumer. Following the issue of new HUL shares, Unilever’s holding in HUL would drop from 67.2% to 61.9%, the company said. HUL will also market and distribute some brands of GSK Healthcare such as Sensodyne, Otrivin, Crocin and Eno.

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