Signals, Powered By EquityPandit
Hindustan Unilever Limited (HUL), one of largest FMCG player in the country, has announced that its board has approved the merger with GlaxoSmithKline Consumer Healthcare (GSKCH India) through an-all equity deal, valuing the total business of the latter at Rs 31,700 crore.
HUL said in the statement, “The Board of directors of the company, have considered and approved a scheme of amalgamation between the company and GlaxoSmithKline Consumer Healthcare Limited (GSK CH), and their respective shareholder and creditors (Scheme).”
According to the HUL BSE filing, the merger of GSK CH India with HUL will be on a basis of an exchange ratio of 4.39 HUL shares for each GSK CH India Share, implying a total equity value of INR 317 billion for 100% of GSK CH India.
Following the issue of new HUL shares, Unilever‘s holding in HUL will be diluted from 67.2% to 61.9%. The merger includes the totality of operations within GSK CH India, including a consignment selling contract to distribute GSK CH India’s Over-the-Counter and Oral Health products in India. The transaction is expected to be completed in one year subject to regulatory and shareholder approvals.
Commenting on the development, HUL CMD Sanjiv Mehta, Chairman and Managing Director said: “With this proposed strategic merger with GSKCH India, we will be expanding our portfolio with great brands into a new category catering to the nutritional needs of our consumers.” Mehta added, “We will become one of the largest F&R businesses in the country.”
