GlaxoSmithKline Said To Eye Sale Of $3.9b Stake In Indias HUL

GlaxoSmithKline Plc (GSK) will soon begin selling its stake in Hindustan Unilever Ltd (HUL) estimated to be worth almost ₹29,850 crore ($3.9 billion), a person aware of the development said. GSK received the shares earlier this month in return for the sale of its Indian consumer business to HUL.

The two multinational giants had announced the all-share deal worth ₹31,700 crore ($3.8 billion) in December 2018. Bloomberg first reported on Wednesday that GSK was in discussions with its advisers on when to launch the transaction.

In a statement on 1 April, Glaxo said HUL has paid it an extra ₹3,045 crore (approximately $400 million) crore to acquire the Horlicks brand for India, after seeking approval from the board of HUL, exercising the option available in the original agreement made between Unilever and GSK.

GSK Consumer Healthcare’s brands such as Horlicks, Boost and Maltova are now part of HUL’s food and refreshments business in the nutrition category. As part of the merger, 3,500 GSK employees will also become part of the Indian arm of the Anglo-Dutch giant Unilever. Under the deal, HUL will distribute GSK’s brands such as Eno, Crocin, Sensodyne, etc. in the country.

“GSK’s intent was to start selling its shares as and when the merger was consummated. They will sell the shares in parts over a period of time, given the size of the stake they hold. Investment banks JP Morgan, Morgan Stanley and others are advising GSK on this share sale,” the person cited earlier said, requesting anonymity as he is not authorized to speak to reporters. GSK did not respond to a request for comment.

No final decision has been taken on the timing of the proposed sale, and Glaxo could decide to postpone the sale depending on market conditions and investor demand, Bloomberg reported, citing people it did not name.

“GSK intends to monetise its holding in HUL at such time it considers appropriate, taking into account market conditions,” GSK had said after the completion of the merger.

Spokespeople for Morgan Stanley and JP Morgan declined to comment.

GSK’s plan to sell the HUL shares comes at a time when the FMCG major’s stock has been one of the outperformers in a market ravaged by the covid-19 pandemic.

This article was first published on livemint.com.