Sale of GlaxoSmithKline India’s 72.5% stake in Indian subsidiary GlaxoSmithKline Consumer Healthcare could fetch upwards of $4 billion

Among the bidders, Coca-Cola, Nestle and Unilever. Given Nestle’s position, and its considerable market presence in the malt-drink sector in India, its synergies matches well for GSK’s Horlick’s brand.

According to 4 sources familiar with the matter at hand, Coca-Cola, Nestle and Unilever are among the bidders for GlaxoSmithKline’s Indian Horlicks nutrition business. The deal is expected to fetch at least $4 billion.

The initial bids which were due on Monday, saw these consumer giants emerge as front runners. The deal offers a significant footprint in India’s nutrition drink business, in a fast-growing country in the emerging market.

Despite the fact that Indian shoppers have, of late, been hard pressed by the introduction of the Goods and Service Tax, of a devaluation of the Indian Rupee, a growing population and rising wealth has placed India as an attractive growth market for companies who have been trying to offset weak growth in Western markets.

As per two sources, as yet it is unclear which other consumer health product company was bidding. What is known is that Reckitt Benckiser, a company which is eager to build up its consumer health operation, did not join the bidding war.

While Coca-Cola did not immediately respond to requests for comments, Nestle, GSK, Unilever and Reckitt declined to comment.

Horlicks is a malt-based drink dating back to 1873, when two British-born men, James and William Horlick, founded a company in Chicago to manufacture it. It was taken to India by soldiers who had fought with the British Army in the First World War.

Since then, Horlicks has been developed by GSK in India into a much bigger brand. In March 2018, having purchased Novartis out of their consumer healthcare joint venture for $13 billion, GSK started a review of its Horlicks business as well as other smaller products.

Emma Walmsley, GSK’s Chief Executive, who took over last year, is looking to sharpen the focus of what is one of the world’s more diversified pharmaceuticals companies.

One of GSK’s main assets on the block is its 72.5% stake in its Indian subsidiary GlaxoSmithKline Consumer Healthcare which is famous for its Horlicks brand; it also makes a chocolate-flavored malt-based drink Boost.

As per a source, Nestle is particularly well-positioned to acquire the stake since it is the world’s biggest packaged food company, and owns Milo, a rival malt drink; it also has a big presence in India; all of these bodes well for synergies.

According to sources familiar with the matter at hand, on several occasions, Nestle has let it be known to GSK privately that it is interested in acquiring the Horlicks brand.

GSK is being advised by Morgan Stanley and Greenhill.

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