Dainik Nation News Portal
DAINIK NATION BUREAU
British pharmaceutical company Glaxosmithkline plc will assess its Indian Consumer healthcare subsidiary as it looks to fund a $13 billion buyout of Novartis’ stake in their global consumer healthcare joint venture, the company said on Tuesday. This is part of a “strategic review” of consumer nutrition products that may include the sale of Horlicks, for which India is a big market.
It is not clear whether this assessment means that GSK plc would dilute its 72.5% stake in the subsidiary, GSK Consumer Healthcare Ltd India. Although there is no official confirmation came so far. Once it come then we will update this story.
Horlicks Ltd held 43.16% stake in GSK Consumer Healthcare Ltd as of December 2017, according to the Bombay Stock Exchange. GSK expects the outcome of the strategic review to be concluded around the end of 2018, the company stated in a global release. It added that there can be no assurance that the review process will result in any transaction.
“GSK is initiating a strategic review of Horlicks and its other consumer healthcare nutrition products to support funding of the transaction, and to drive increased focus on over the counter and oral health categories,” stated GSK’s release. The combined sales of these products were approximately £550 million (around Rs 5,000 crore) in 2017, it added.
The consumer healthcare business will continue to invest in growth opportunities for brands like Sensodyne and Eno and is also “actively” investing in its pharmaceutical and vaccines businesses,
stated the company. This includes a new manufacturing facility in Vemgal, Karnataka and Nashik, it added.
The majority of Horlicks and other nutrition products sales are generated in India, with the Horlicks range widely recognised as a portfolio of premium nutrition products, GSK said.
At the same time, GSK Plc’s global nutrition sales were “adversely impacted” in part by the implementation of the Goods and Services Tax in India in July 2017 as well as “continued competitive pressures” for Horlicks in India, according to the firm’s latest annual report.
In India, Horlicks is sold by GlaxoSmithKline Consumer Healthcare Ltd, which is listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). Other consumer nutrition products sold by the firm here include Boost, Foodles, ActiBase, Viva and Maltova, according to its website.
As on the financial year ended March 31, 2017, malt-based foods contributed 95% to the total turnover of the company, according to GSK Consumer Healthcare Ltd’s 2017 annual report.
GSK Consumer Healthcare Ltd’s share prices rose 1.95% to close at Rs6,633 a piece on BSE on Tuesday. they reportedly increased its stake in the Indian consumer healthcare business to 72.5% from 43.2% in 2013.
On Tuesday, Novartis agreed to sell its 36.5% stake in its consumer healthcare joint venture with GSK in a deal that would enable the Swiss drug maker further focus on the development and growth of its core businesses.
“While our consumer healthcare joint venture with GSK is progressing well, the time is right for Novartis to divest a non-core asset at an attractive price,” said Vas Narasimhan, CEO of Novartis in a release on Tuesday. “It will strengthen our ability to allocate capital to grow our core businesses, drive shareholder returns, and execute value creating bolt-on acquisitions as we continue to build the leading medicines company, powered by digital and data,” he added.
NB–ET
