Unilever to buy 82pc stake of GlaxoSmithKline BD

Following the completion of its previously announced strategic review, GlaxoSmithKline plc (LSE/NYSE: GSK) on Monday announced the divestment of Horlicks and other consumer healthcare nutrition brands to Unilever plc ("Unilever") and the merger of GSK Consumer Healthcare Limited ("GSK India") with Hindustan Unilever Limited ("HUL").

The total consideration is valued at approximately £3.1 billion based on the 15-day volume weighted average price (VWAP) ended on Friday of HUL shares of INR1,717. Net proceeds are estimated to be approximately £2.4 billion on the same basis, said a statement.

In India, Horlicks and other nutrition products are sold by GSK India, a public company listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE), in which GSK holds a 72.5 per cent stake.

The proposed transaction involves the merger of GSK India with HUL, a public company listed on the NSE and BSE, following which GSK will own approximately 5.7 per cent of HUL. The merger values GSK India at INR317 billion in total, or INR7,540 per share, a 15.4 per cent premium to the un-disturbed share price of INR6,531 as at close of business on 26 March 2018.

Following completion of the transaction, currently expected by the end of 2019, GSK intends to sell down its holding in HUL. Such sell down will be in tranches and at such times as GSK considers appropriate, taking into account market conditions.

In addition, GSK is to sell its 82 per cent stake in GlaxoSmithKline Bangladesh Limited and other related brand rights for GSK's consumer healthcare nutrition activities in certain other territories to Unilever, for which it is expected to receive cash proceeds equivalent to £566 million.