Unilever close to buying GSK's Horlicks business - report

28th Nov 2018 08:35

(Sharecast News) - Unilever is in pole position to guzzle up GlaxoSmithKline's Indian Horlicks business and associated nutrition brands for around $4bn, according to reports.Glaxo has granted its fellow FTSE 100 company exclusivity on talks, the Financial Times reported, as part of the drug giant's strategy to focus on its core business.The deal is expected to include the Horlicks malted drink brand as part of wider nutrition business listed in India and Bangladesh.Nestlé and Coca Cola were said to have been beaten off in the auction process.GSK owns a 72.5% stake in the Bombay Stock Exchange-listed business, which has a market cap of $4.2bn, plus a smaller Bangladesh-listed business. GSK, which is looking to double down on pharmaceuticals and healthcare businesses after buying out Novartis of their consumer healthcare joint venture earlier this year, made revenues of more than £0.5bn from nutrition products last year.Likewise, Anglo-Dutch consumer goods colossus Unilever has refined its focus following the sale of its spreads business a year ago for €6.825bn."The price for the Horlicks business would appear to be around $3.5bn to $4.5bn which given the growth potential would seem to be fairly good value," said analyst Michael Hewson at CMC Markets.