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GlaxoSmithKline's $4 billion Consumer Nutrition Business: Bidding to begin soon; Nestle, HUL, ITC likely in the race


From the likes of Nestle, HUL, ITC and Coca-Cola, everyone seems to have lined up for GSK's consumer nutrition business. The $4 billion business sale includes malted food drinks brands like Horlicks, Boost and Maltova.

Companies like Nestle Hindustan Unilever Ltd (HUL), ITC Ltd and Coca-Cola are all set to bid for GlaxoSmithKline's (GSK) $4 billion (Rs 27,400 crore*) consumer nutrition business in India, sources told CNBC-TV18.
Sources also said that private equity firms like KKR is also evaluating opportunities to get a foothold in the nutrition foods business and could be looking at GSK's portfolio closely.
The bidding process for the $4 billion business is likely to be handled from GSK's global headquarters in London, UK.
In March this year, GSK said that the company will conduct a strategic review of its consumer nutrition business, including the sale of malted food drinks (MFD) brands like Horlicks, Boost, Maltova.
The MFD industry is estimated at roughly Rs 8,000 crore with Horlicks at the top of charts with 44.3% market-share.
As per the sources, non-obligatory first bids are likely to be submitted by August 2018 while the final sale process, including the negotiations, is likely to take three to four months.
ITC, Coca-Cola, HUL, Nestle India said they would not like to comment on market speculations.
GSK, in its reply, said the strategic review is still in the process and would be concluded only by the end of the year.
According to an Economic Times report, Boost and Horlicks had a combined revenue of £550 million in 2017, with India contributing most of it.
US-based multi-national food and beverage company Kraft Heinz too is looking to sell its consumer food business in India for a valuation of up to $1 billion (Rs 6,860 crore*).
Kraft's consumer food business in India includes MFD Complan which is in direct competition to GSK's Horlicks and Boost.
Media reports suggest that ITC is interested in Complan as well. Other companies who may be vying Kraft's consumer business in India include Emami, Wipro, Abbott, Zydus Wellness. Two private equity firms, namely; Blackstone and Carlyle are also said to be in the fray.
Apart from Complan, other brands in Kraft's consumer food business in India are: Glucon-D, Nycil and Sampriti Ghee.
Complan has nearly 8 percent  market-share in the MFD sector.
*US dollar is currently trading at Rs 68.6. 

Market Movers

TATA Cons. Prod735.90 16.40 2.28
NTPC119.80 2.00 1.70
Nestle17,965.20 280.40 1.59
ONGC126.70 1.35 1.08
HUL2,407.90 15.95 0.67
Nestle17,972.45 292.95 1.66
NTPC119.80 1.90 1.61
ONGC126.65 1.30 1.04
Bajaj Finserv11,889.85 90.80 0.77
HUL2,409.15 18.00 0.75
TATA Cons. Prod735.90 16.40
NTPC119.80 2.00
Nestle17,965.20 280.40
ONGC126.70 1.35
HUL2,407.90 15.95
Nestle17,972.45 292.95
NTPC119.80 1.90
ONGC126.65 1.30
Bajaj Finserv11,889.85 90.80
HUL2,409.15 18.00


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