GSK Consumer confirms merger with HUL

The board of the health drink major company has approved a scheme of amalgamation with FMCG major Hindustan Unilever Limited on Monday. The scheme is subject to regulatory approval.

GSK (GlaxoSmithKline Plc), the parent company which holds 72.5 per cent stake in GSK Consumer Healthcare Limited (India) has announced to divest its consumer healthcare product segment to Unilever Plc. Accordingly, the company iconic brand Horlicks and other nutrition brands will to divested to Hindustan Unilever Limited (HUL) in India.

The deal involves the merger of GSK Consumer Healthcare with HUL, both of which are listed entities in India. Post merger, GSK will own approximately 5.7 per cent of HUL. The deal values GSK Consumer Healthcare Limited (India) at Rs. 317 billion or Rs. 7,540 per share.

The exchange ratio for the merger is 4.39 equity shares of HUL for every share of GSK Consumer Healthcare Limited.

GSK Consumer Healthcare and HUL are expected to achieve significant synergies through supply chain benefits, operational and scale efficiencies and cost reduction in marketing.

At 15:03 hours, the stock of Glaxosmithkline Consumer was at Rs. 7,485.00 per share, up by Rs. 215.05 or 2.96 per cent, while Hindustan Unilever was at Rs. 1,813.40, up by Rs. 59.80 or 3.41 per cent on BSE.