Unilever will buy 82 per cent shares of GlaxoSmithKline Bangladesh Limited for Tk 1,604 crore as part of the GSK’s move to divest Horlicks and other consumer healthcare nutrition brands to Unilever.
General and institutional investors own the rest 18 per cent shares of GSK Bangladesh, a listed company.
With the sales of the shares to Anglo-Dutch giant Unilever, UK-based GSK will virtually leave Bangladesh market as it earlier closed its pharmaceutical unit.
GSK on Monday announced the divestment of Horlicks and other consumer healthcare nutrition brands to Unilever plc for a total consideration valued at approximately $3.8 billion.
The transaction covers GSK’s health food and drinks portfolio in India, Bangladesh and 20 other predominantly Asian markets. The business has annual sales of around 550 million euros, primarily through the malt-based Horlicks and Boost brands.
In India, Horlicks and other nutrition products are sold by GSK India, a public company listed on the National Stock Exchange and Bombay Stock Exchange in which GSK holds a 72.5-per cent stake.
The company will continue to invest in growth opportunities for its OTC and Oral Health brands there, which include Crocin, Eno and Sensodyne.
Total consideration receivable by GSK is therefore expected to have a value of approximately £3.1 billion where £2.6 billion for merger between GSK India and Hindustan Unilever Limited and £150 million for 82 per cent shares of GSK Bangladesh and £416 million for the sale of brand rights and GSK’s consumer healthcare nutrition activities in certain other territories.
The proposed transaction involves the merger of GSK India with HUL, a public company listed on NSE and BSE, following which GSK will own approximately 5.7 per cent of HUL.
The merger values GSK India at INR317 billion in total, or INR7,540 per share, a 15.4-per cent premium to the un-disturbed share price of INR6,531 as at close of business on March 26, 2018.
HUL will distribute GSK’s OTC and Oral Health brands that are currently distributed by GSK India. This arrangement will be for a period of five years.
HUL is the largest FMCG company in the country, with strong distribution reaching over seven million outlets across India.
The sale follows a competitive auction in which Unilever saw off rival Nestle, as well as earlier interest from Coca-Cola.
Emma Walmsley, chief executive officer of GSK, 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
The net proceeds receivable by GSK are currently estimated at around £2.4 billion. The final amount of net proceeds received will only be determined once the shares in HUL to be received have been monetized and after hedging costs, taxes and other expenses have been settled.
Earlier, GSK Bangladesh closed pharmaceutical business with a view to maximising profit in the long run and continues its consumer healthcare business in Bangladesh.
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