For a long time now, Hindustan Unilever (HUL) has been flirting with malted food drinks. It launched Kissan Amaze in 2008 in its maiden foray into the business. A high decibel advertising and marketing effort came a cropper before Amaze was eventually cast away.
Marking a clear departure from trying to grow its own brand, HUL has now decided to merge GSK Consumer Healthcare with itself in a transaction worth a whopping Rs.31,700 crore or 7.5x revenue. GSK Consumer shareholder will get 4.39 shares of HUL for every one share held and stake of Unilever in HUL will come down to 67.2% to 61.9%. In comparison, the recently announced Zydus-Kraft Heinz deal was valued at Rs 4,600 crore was closer to three times sales.
Boost, Viva and Maltova will be owned by HUL and the Horlicks brand will be owned by Unilever. HUL will pay royalty for its use in India. Sagarika Mukherjee of Elara Capital, while admitting that the valuation does look a little high, the growth potential in the “super premium” category cannot be ignored. “The market is evolving from one that is around micro nutrients deficiency to lifestyle management products and general health supplements. Besides, there is also potential to create sub-segments to reach out to a larger base,” she