HUL, GSK Consumer hit lifetime highs ahead of merger

Shares of Hindustan Unilever (HUL) and Glaxosmithkline (GSK) Consumer touched all-time highs on Tuesday, a day before the merger of the latter into HUL becomes effective.

On March 13, HUL had said that its board of directors would meet on April 1 to discuss about the merger, which has received approval from the Mumbai and Chandigarh Benches of the National Company Law Tribunal.

The stock price of HUL and GSK Consumer rallied 5.08 per cent and 5.72 per cent each on Tuesday, closing trade at ~2,298.15 and ~9,993.10 per share on the BSE.

In the last one year, HUL has rallied 35 per cent, while GSK Consumer has surged 39 per cent on the BSE, as investors gave the thumbs up to the merger.

On December 3, 2018, HUL’S parent Unilever had announced the acquisition of health food drinks Horlicks and Boost, among other brands, from GSK Consumer in India and other markets, valuing the business at nearly ~32,000 crore.

GSK Consumer is the market leader in the health food drinks (HFD) category in India, implying HUL will now compete directly with rivals Nestlé and Mondelez in the segment. On Tuesday, Nestlé rallied nearly 4 per cent on the BSE, closing trade at ~16,302.40 per share.

HUL has put a blueprint in place that will see it push aggressively into the pharmacy trade channel, using a combination of acquired and in-house health care brands.

Apart from Horlicks and Boost, HUL acquired intimate hygiene brand Vwash from Glenmark Pharmaceuticals last week and will also distribute over-thecounter brands Sensodyne and Crocin for GSK.

The company already has hygiene brand Lifebuoy in its portfolio, which it has been pushing aggressively during the ongoing Covid-19 crisis, cutting price of hand sanitisers and hand wash under the Lifebuoy brand.