Nestle, Unilever and Coca-Cola shortlisted by GSK to bid for its Indian nutrition business

Oct 1, 2018

Image Source: Altonivel

GlaxoSmith-Kline has shortlisted Nestle, Unilever and Coca-Cola among companies for the second round of bidding for its Indian nutrition business, which includes the prized Horlicks brand. Negotiations for the GSK Consumer portfolio are set to intensify as fresh rounds of management committee meetings are scheduled in London next week.

The highly competitive auction process had seen some of the world’s biggest food and drinks companies including PepsiCo, Reckitt Benckiser, General Mills, Danone, and Kellogg’s besides homegrown ITC and private equity buyout funds like KKR vie for the GSK Consumer portfolio.

India is a priority market for GSK and it will continue to invest in growth opportunities for its OTC and oral health brands, such as Sensodyne and Eno. 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. Hence its interest in the GSK brands, Nestle is looking to cross-synergise Milo’s distribution through pharmacy channels that already sell its infant food brands like Cerelac and Nan.

Anglo-Dutch firm Unilever is looking to step up its play in foods globally, led by former India chief executive Nitin Paranjpe, who is president of the company’s Rotterdam-based food and refreshment business.

HUL reported sales of Rs. 1,147 crore from its foods division (with brands like Knorr, Kissan, Annapurna) during FY18. The company’s refreshments business (which includes Brooke Bond, Bru, Lipton and Kwality Walls) did annual sales of Rs 5,181crore. Foods and refreshment, which the company merged in July this year, together make up for 18 per cent of HUL’s annual 35,000-crore turnover.

Coca-Cola has also progressed to the final stages of negotiation with Kraft Heinz’s Indian consumer brand portfolio such as milk drink Complan, Nycil talcum powder, Sampriti Ghee and energy drink powder Glucon D. So, it could pose potential CCI related antitrust issues.

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