GSK seeks mid-Sept bids for $4b Horlicks unit in India
GlaxoSmithKline is seeking initial bids by mid-September for its India-focused Horlicks health nutrition business, which is expected to fetch more than $4 billion, two people familiar with the situation said on Tuesday.
The British drugmaker started a strategic review of Horlicks – a malt-based drink brand popular in India – and some smaller products, after buying Novartis out of their consumer healthcare venture for $13 billion in March.
Potential acquirers are likely to include major food and consumer products groups, such as Nestle, Pepsico and Reckitt Benckiser, the sources said. The large Indian consumer business could also be of interest to other food and drink companies. GSK, Nestle and Reckitt declined to comment, while officials at Pepsico were not immediately available.
The timing of the bidding process was first reported by Bloomberg. The main asset on the block in the sale is GSK‘s 72.5 percent stake in its Indian subsidiary GlaxoSmithKline Consumer Healthcare, which is famous for Horlicks but also makes other products, including the chocolate-flavoured malt-based drink Boost.
Horlicks is more than 140 years old with origins dating back to 1873, when two British-born men, James and William Horlick, founded a company in Chicago to manufacture the drink. It was introduced to India by Indian soldiers who had fought with the British Army in the First World War. Nestle, the world’s biggest packaged food company, has previously told GSK privately of its interest in Horlicks on several occasions, people familiar with the matter told Reuters earlier this year.
Nestle already owns the malt drink Milo, but it is not a big seller in India. GSK is being advised by Morgan Stanley and Greenhill.
August 22, 2018
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