BASEL (dpa-AFX) - GlaxoSmithKline (GSK.L, GSK) has entered into exclusive negotiations to sell its nutrition business to Unilever (UN, ULVR.L, UL), ending a multi-month auction process for the $4 billion unit that includes the prized Horlicks malted drink brand popular in India, Financial Times reported citing people familiar with the sale process.
The Anglo-Dutch consumer company beat a rival bid from Swiss food and beverage group Nestlé, which was looking to build on its market-leading position in powdered hot drinks, where it already sells Milo and Nesquik, the report said.
Coca-Cola was also shortlisted to join the final round of the auction for the business which began in September but its interest cooled, the report said.
The report noted that Unilever's offer price could not be determined but GSK's Indian business is listed on the Bombay Stock Exchange, with a market value of $4.2 billion. That would mean GSK's 72.5 per cent stake in the business is worth roughly $3bn without a takeover premium. The deal is also expected to include GSK's Bangladesh-listed business.
GSK is selling the business because its priorities have shifted under Emma Walmsley, chief executive. A trigger for GSK's decision to sell was its $13 billion acquisition of Novartis's stake in the companies' consumer health joint venture after the Swiss drugmaker decided to exit.
Copyright RTT News/dpa-AFX