GSK weighs selling Horlicks

Global food and beverage giants are scrambling to outbid each other for GlaxoSmithKline’s Horlick health nutrition business amid a review announced by the UK-based company, including options to sell some nutrition brands such as Horlicks.

Coca-Cola, Nestle and Kraft Heinz are said to be among the companies bidding for the 145 year old brand, with Coca-Cola said to be the front runner with a £3bn (US$4bn) offer.

According to a report by Reuters in March, the most enticing asset up for sale is GSK’s 72.5% stake in its Indian subsidiary GlaxoSmithKline Consumer Healthcare. The sources said the stake was worth $3.1 billion at current market prices but GSK wanted a premium in any sale.

GSK in March agreed to buyout Novartis’ 36.5% stake in a joint-venture partnership in its Consumer Healthcare business for $13bn thereby taking majority control of the business.

The British-based firm initiated a strategic review of its business last July with a view of selling Horlicks and its other consumer healthcare nutrition products so it could focus on pharmaceuticals. The proceeds from the sale of Horlicks and other nutrition products would be used to pay for the Novartis deal.

Horlicks which is made from wheat, malted barley, sugar, milk and 14 vitamins is manufactured in several countries including the UK, Australia, Nigeria, New Zealand, Hong Kong, Bangladesh, Jamaica and India being its biggest market.

Other firms likely to make a bid for the malt drink include Associated British Foods (ABF), which owns the Ovaltine brand, PepsiCo, Suntory, Mondelez International, Unilever and JAB, the coffee company.

According to the UK Sunday Telegraph which reported on the story, no final decision on the sale has yet being made because a strategic review is still under way and is unlikely to be finished before the end of the year. GSK would not comment on the story.



Source: products

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