Anglo-Dutch giant Unilever on Monday announced that it will buy Glaxo Smith Kline’s (GSK) Horlicks and other nutrition products for 3.3 billion euros. The deal will be completed in the next 12 months.
As a part of the deal HUL will merge with GSK consumer India.
The Anglo-Dutch Unilever edged past Nestle, the world’s largest food and drinks company, in a closely fought battle between the European consumer giants. The deal will strengthen Unilever’s position in India, its most important emerging market.
Horlicks ranks a distant 56th globally in the health-and-wellness beverage category, according to Euromonitor – but in India it’s No. 1, ahead of Mondelez International Inc.’s Cadbury Bournvita and GSK’s other malt drink Boost. Unilever’s extensive distribution channels include training local women as rural sales agents.
According to a Bloomberg report, Horlicks is facing a challenge in India. The drink is losing its status as the go-to morning drink of choice pushed by Indian parents on their children. In a worst-case scenario, it could wind up with the image it has in the U.K., its home market: a sleep-inducing bedtime drink for the elderly.
It has other issues to contend with. Indians historically have been big buyers of so-called health-food drinks – a market GSK Consumer controls half of – because companies have been able to pitch their products as essential nutritional supplements. That resonates in a country home to about a quarter of the world’s undernourished people.
Horlicks’s current ad campaign highlights that the drink “contains bioavailable nutrients, which gets absorbed in the blood and hence makes kids more tall, more strong, and more sharp,” Vivek Anand, GSK Consumer’s finance director, told an investor call earlier this month.