GlaxoSmithKline Consumer Healthcare merges with Hindustan Unilever 

A new milestone in India’s nutrition story


Hindustan Unilever (HUL), India’s largest fast-moving consumer goods company, announced that it has completed the merger of GlaxoSmithKline Consumer Healthcare (GSKCH) with HUL. This merger was announced on 3rd December 2018 and was subject to obtaining necessary approvals, which have now been secured. According to the company’s press release, this is one of the largest deals in the FMCG sector in recent times and will lead to significant value creation for all stakeholders.

In addition, the Board of Directors of HUL have approved HUL acquiring the Horlicks Brand for India from GSK for a consideration of Euro 375.6 million (approximately Rs 3045 crore), exercising the option available in the original agreement made between Unilever and GSK. This will enable HUL to utilize cash on its balance sheet and create value for shareholders. In addition, it will allow 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 the merger.

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 megatrend of health and wellness. GlaxoSmithKline Consumer Healthcare is the undisputed leader in the health food drinks (HFD) category, with iconic brands such as Horlicks and Boost, and a product portfolio supported by strong nutritional claims. Horlicks, with a volume share of close to 50%, was introduced to India in the 1930s and has been an everyday nutrition staple in households across generations. This merger will bolster HUL’s focus on building a profitable and sustainable Nutrition business in India.

HUL to unlock significant synergies both from revenue and costs

The nutrition and health drinks category remains under-penetrated in India and HUL is well-positioned to further develop the market given the extent of its reach and capabilities. As shared earlier, HUL will be partnering 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, and others) and HUL’s distribution strength, can unlock value for GSK and build further Hindustan Unilever’s go-to-market capabilities.

Sanjiv Mehta, chairman and managing director, Hindustan Unilever, said, “Brands such as Horlicks and Boost are iconic, and we are excited to have them in the Hindustan Unilever fold. 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 programs. I am delighted to welcome the 3500 – strong Nutrition Team to the HUL family. Both organizations have common values coming from a lineage of respected parent companies and a shared heritage of building iconic trusted brands.

In the current context, the focus of the company has been to ensure that all our people remain safe and we do our best to keep supply lines running for essential products. In these difficult times, we are joining hands with the Government in the fight against COVID 19’’

The Covid-19 pandemic led to the country-wide lockdown on 25 March 2020. It will be two years tomorrow as I write this. What have we learned in this time? Maybe the meaning of resilience since small companies like us have had to rely on our resources and the forbearance of our employees as we have struggled to produce our trade platforms.

The print and packaging industries have been fortunate, although the commercial printing industry is still to recover. We have learned more about the digital transformation that affects commercial printing and packaging. Ultimately digital will help print grow in a country where we are still far behind in our paper and print consumption and where digital is a leapfrog technology that will only increase the demand for print in the foreseeable future.

Web analytics show that we now have readership in North America and Europe amongst the 90 countries where our five platforms reach. Our traffic which more than doubled in 2020, has at times gone up by another 50% in 2021. And advertising which had fallen to pieces in 2020 and 2021, has started its return since January 2022.

As the economy approaches real growth with unevenness and shortages a given, we are looking forward to the PrintPack India exhibition in Greater Noida. We are again appointed to produce the Show Daily on all five days of the show from 26 to 30 May 2022.

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– Naresh Khanna

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