GSK share price: Pharmco confirms it is looking at merger for Horlicks business

Statement follows press speculation

GSK share price: Pharmco confirms it is looking at merger for Horlicks business

GlaxoSmithKline (LON:GSK) is considering a merger of its consumer healthcare business as part of a review of the unit, the blue-chip group has confirmed. The FTSE 100 drugmaker launched a review of the business, which includes the Horlicks malted drink brand popular in India, earlier this year, when it also completed the buyout of Novartis’ stake in their Consumer Healthcare joint venture.

GSK’s share price has climbed into positive territory in London in today’s session, having added 0.63 percent to 1,595.80p as of 13:37 GMT. The advance is largely in line with gains in the broader UK market, with the benchmark FTSE 100 index currently standing 0.69 percent higher at 7,052.76 points. The group’s shares have added more than 22 percent to their value over the past year, as compared with about a 4.6-percent dip in the Footsie.

GSK confirms merger plans

The FTSE 100 drugmaker confirmed in a short statement today that consideration was being given to a potential transaction which includes a merger of the group’s GlaxoSmithKline Consumer Healthcare Limited business, which generates the majority of  Horlicks and other GSK nutrition products sales in India.

“There can be no assurance that a transaction will result from the review process or the evaluation of this option nor has any decision on the matter been made by the Company,” the company said in the statement, without providing further details.

Ongoing speculation

The statement came after the Financial Times reported this week that the London-listed drugmaker had entered into exclusive talks with Unilever (LON:ULVR) about the sale of the division, after the Anglo-Dutch consumer goods giant beat a rival bid from Nestlé. India’s CNBC TV18 meanwhile reported yesterday that Unilever might be looking to merge GSK Consumer Healthcare with its Indian unit HUL.

As of 14:11 GMT, Thursday, 29 November, GlaxoSmithKline plc share price is 1,596.20p.

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