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Hindustan Unilever has acquired Horlicks

  • Published | 04 December 2018
Hindustan Unilever has acquired GSK consumer healthcare product Horlicks at a swap ratio of 4:39:1, deal valued at USD 450.40 crore
India: Hindustan Unilever Ltd. (HUL) has acquired Horlicks to become the country’s largest food company. This acquisition will help HUL to strengthen their market into health and wellness space. Further, the company has planned to enter into five-year contract to distribute GSK consumer’s products. HUL will also market and distribute some brands of GSK healthcare like Sensodyne, Otrivin, Eno, and Crocin. According to HUL, this acquisition was very important for their pharmacy business segment; there are various GSK brands which are sold through chemist. This will benefit HUL to reach large customer base. According to BlueWeave Consulting, India is a priority market for GSK. Horlicks and Boost brands have strong positioning in the Indian market and command approximately 70% of overall value market share in Indian Malted Food Drinks (MFD) market. While the India arm of Nestle, the world’s largest food company, sells malt drink, Milo, it remains a small brand in a market dominated by Horlicks. The acquisition of Horlicks will also boost Milo's distribution through the pharmacy channel. However, it is a stagnant category in terms of growth; still, there is huge potential for scale-up for malt beverage drinks in a key emerging market such as India. The acquisition of Horlicks would give Nestle an immediate category leadership given that it already has Milo in the malt drink segment. Hence, this acquisition will have a significant impact on the consumer health drink industry and will expand phenomenally in the years to come. According to the upcoming report by BlueWeave Consulting on “Global Malted Beverages Market, By Type, By Distribution Channel, By Region- Industry Analysis, Size, Share, Growth, Trends & forecast by 2018-2025”, the global malted beverages market is projected to grow significantly during the forecast period. Malt beverage is a fermented drink in which the principal component is the grain, or seed, of the barley plant. The cereals are predominantly kept in water for germination; later they are dried, boiled and processed into dry powder. The dry powder is also known as malt which is supplemented with vitamins, minerals, fiber, and protein for adding nutritional value. Malt contains half sweet as normal sugar and generally used as a healthier alternative sweetener. Parents opting for healthy and nutritional products for their children’s, high demand for quality products, increasing health awareness, growing nutritional concern, rising number of nuclear families, increasing product endorsement by companies are some factors, which are expected to boost the malted beverages market globally.