GlaxoSmithKline Considering Merger of Indian Subsidiary
November 29 2018 - 7:57AM
Dow Jones News
By Ian Walker and Denise Roland
GlaxoSmithKline PLC (GSK.LN) said Thursday it is considering a
potential merger of its majority-owned Indian subsidiary, but
cautioned that there's no certainty any deal will be struck.
Any such merger is likely to be related to the sale of Glaxo's
nutrition business, which makes the vast majority of its revenue in
India through the subsidiary, called GlaxoSmithKline Consumer
Healthcare Ltd.
Glaxo is currently in talks with Unilever PLC (ULVR.LN) over the
sale of its nutrition business, the Wall Street Journal reported
Tuesday, citing people familiar with the matter. GlaxoSmithKline
Consumer Healthcare Ltd. is mainly concerned with selling its
parent company's nutrition products in India, but it also sells the
company's non-nutrition brands, like Sensodyne toothpaste,
there.
Glaxo had previously said it may sell its 72.5% stake in the
Indian subsidiary, but not that the subsidiary could be merged with
whoever buys the nutrition business.
"In response to recent press speculation, GSK confirms that
consideration is being given to a potential transaction that
includes a merger of GSKCH [GlaxoSmithKline Consumer Healthcare
Ltd.]," Glaxo said in a brief statement.
The WSJ said that if finalized, a deal would end a monthslong
auction process that also drew interest from Nestle SA (NESN.EB)
and Coca-Cola Co. (KO), who were all eager to bolster their
presence in one of the world's most promising consumer markets.
The centerpiece of GSK's nutrition business is the Horlicks
brand, a malted-milk drink that is popular in India.
Some analysts have suggested Horlicks could be valued at as much
as $3 billion, the WSJ said.
The deal could be completed in the coming weeks, one of the
people familiar with the matter said.
The talks had been previously reported by the Financial
Times.
Write to Ian Walker at ian.walker@wsj.com; @IanWalk40289749 and
Denise Roland at denise.roland@wsj.com
(END) Dow Jones Newswires
November 29, 2018 07:42 ET (12:42 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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