GSK Begins ‘New Chapter’ in India As It Offloads Nutrition Brands
Executive Summary
GSK commits to investing behind OTC and oral health brands in India after offloading nutrition assets to Unilever.
GSK Consumer Healthcare continues to see India as an “important growth market” despite slimming down its portfolio by offloading nutrition assets to Hindustan Unilever.
Completing the sale of Horlicks and other health food drink brands – through a deal signed in December 2018 – GSK said it would focus its efforts in India on growing its OTC and oral health lines.
“The close of this transaction signals the beginning of an exciting new chapter for GSK in India,” commented GSK Consumer Healthcare CEO Brian McNamara, “enabling us to focus and build on our portfolio of brilliant, science-based OTC and oral health brands and to make these products available to more consumers across the country.”
GSK’s remaining consumer healthcare assets in India – including Sensodyne oral health products, Crocin analgesics, Otrivin nasal sprays and Eno antacids – will going forward be distributed by Hindustan Unilever. However, GSK said it would continue to be responsible for demand generation, portfolio strategy, R&D and marketing for the portfolio.
Describing the brands as “market leading,” GSK insisted it was “committed” to investing in India’s consumer healthcare market.
Under the terms of the deal, GSK’s Indian consumer health business has merged with Hindustan Unilever, with GSK receiving a 5.7% stake in the combined business, which it plans to monetize “at such time it considers appropriate, taking into account market conditions.”
As part of the transaction, Unilever has also acquired GSK Bangladesh Ltd. and other GSK commercial operations and assets outside India for cash proceeds equivalent to £397m ($491m).
Horlicks, Boost and GSK’s other nutritional brads weren't a good fit with the wider Consumer Healthcare portfolio. Indeed, the firm sold the UK rights to Horlicks to Aimia Foods Ltd. for an undisclosed amount in 2018. GSK’s CEO Emma Walmsley said that year that the company would focus its consumer business on science-based OTC drug brands, including its oral care lines. (Also see "Horlicks Brings Unilever 'Transformative' Nutritional Deal, Market Challenges" - HBW Insight, 3 Dec, 2018.)
GSK’s shake up in India will not impact the firm’s consumer healthcare joint venture with Pfizer as the firm’s activities in the country were always outside the scope of the deal. (Also see "GSK Unveils Two-Year Plan For Consumer Split" - HBW Insight, 6 Feb, 2020.)