Boost, Horlicks are now HUL brands

Nandana James | | Updated on: Dec 06, 2021

 FILE PHOTO

FILE PHOTO

Hindustan Unilever completes merger with GlaxoSmithKline Consumer Healthcare

Fifteen months after announcing the merger with GlaxoSmithKline Consumer Healthcare Ltd (GSKCH), iconic brands, including Boost and Horlicks, are now finally under Hindustan Unilever Limited (HUL). The company on Wednesday said that it has completed the merger.

The board of directors of HUL also approved the acquisition of the Horlicks Brand for India from GSK for a consideration of ₹3,045 crore.

GSK Plc (including its other group companies) will now own 5.7 per cent of the merged entity. As a result, Unilever’s stake in HUL will reduce to 61.9 per cent from the earlier 67.2 per cent. GSK’s 3,500-strong nutrition team will also join HUL.

This merger was announced on December 3, 2018 and was subject to obtaining necessary approvals, which have now been secured. This marks one of the largest deals in the FMCG sector in recent times.

“This (merger) will enable HUL to utilise cash on its balance sheet and create value for shareholders. In addition, it will enable HUL to drive better salience in a local context. The other brands which were under the ownership of GSKCH like Boost, Maltova and Viva come to HUL’s brand portfolio by virtue of the merger,” HUL said in a statement.

“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 programmes,” said Sanjiv Mehta, Chairman and Managing Director, Hindustan Unilever.

The merger is in line with HUL’s strategy to build a sustainable and profitable foods and refreshment (F&R) business in India by leveraging the mega trend of health and wellness.

Currently, HUL’s F&R business consists of tea, coffee, ice-cream and packaged foods, and with this merger, nutrition will become a part of this division. Nutrition will be a separate unit within the F&R division, said Srinivas Phatak, CFO, HUL.

IT integration next year

The full IT integration of the merger is likely to be completed by July 2021. HUL will not pay any brand royalty, as it has utilised the cash to own the brand, said Phatak.

HUL will partner with GSK via a consignment selling arrangement to distribute brands of the GSK Consumer Healthcare family in India.

“This partnership, with world-class brands from GSK (like Eno, Crocin, Sensodyne etc.), and HUL’s distribution strength can unlock value for GSK and build Hindustan Unilever’s go-to-market capabilities.” the company said.

By April-end or early May, HUL hopes to complete all procedural formalities relating to the merger, and by this time, GSK’s complete legal entity and its shares will cease to exist and become HUL shares, said Phatak. From an operational perspective, the merger will come into effect from April 1, 2020.

Published on April 01, 2020
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