INSUBCONTINENT EXCLUSIVE:
Glaxo rose 1.4% in early trading in London
Unilever rose 0.6% in Amsterdam.Unilever agreed to acquire GlaxoSmithKline Plc's Indian consumer business, including malted milk drink
Horlicks, for 3.3 billion euros ($3.8 billion) to boost its footprint in one of the world's fastest-growing major economies.It's one of the
Anglo-Dutch company's largest acquisitions under departing Chief Executive Officer Paul Polman, who in January is handing over to
personal-care head Alan Jope
It's also the first major deal since a plan to combine the company's headquarters in the Netherlands collapsed under investor pressure in
October.The transaction strengthens Unilever's presence in the emerging markets that account for about two-thirds of its revenue
The Dove soap maker will use cash and shares of its Indian subsidiary to take control of a new venture that includes Glaxo's listed entity
in the country, where Unilever has been selling products since the late 19th century."If you look at Unilever's foods portfolio in India
they have been seriously lagging for many years now, especially versus the global Unilever portfolio," said Anand Shah, an analyst at Axis
"It's a bid to expand the entire food pie for themselves."Glaxo rose 1.4 percent in early trading in London
Unilever rose 0.6 percent in Amsterdam.India's malt-based hot drinks segment is estimated to be worth Rs 7,870 crore ($1.1 billion),
according to Euromonitor International
In addition to Horlicks, Unilever will gain the Boost brand, another leader in the segment
The deal includes 566 million pounds ($724 million) for an 82 percent stake in Glaxo's Bangladesh unit and other related consumer health
brands outside India.Glaxo may use the proceeds to help fund its buyout of Novartis AG's stake in their consumer-health joint venture
Chief Executive Officer Emma Walmsley has been sculpting the company's portfolio, particularly in its pharma unit, where she's focused on
drug candidates that are most likely to be successful.Malt-based drinks have been popular in India, where they're seen as a nutritional
Unilever is betting on a global "health and wellness megatrend," according to an investor presentation
Yet the segment is expected to grow more slowly than in the past, as consumers switch to less sugary drinks.Unilever will use its more
extensive distribution network to bring the drinks to more consumers, said Sanjiv Mehta, chairman of Hindustan Unilever Ltd., the
Anglo-Dutch company's India subsidiary."If we can carry this portfolio -- and we will carry this portfolio -- into rural and other markets,
we will get significant step up in terms of growth," he said on a call.Nestle SA had also shown interest in acquiring the Glaxo unit, people
familiar with the talks said in November.
