Nestlé, Unilever, and Coca-Cola have reportedly expressed their interests in buying Indian Horlicks which is owned by GlaxoSmithKline. Bids have reached to as much as $4 billion, unnamed sources told Reuters exclusively.
Horlicks is a malt-based drink which was founded as far back as 1873 by James and William Horlick who were both born in Britain. The duo had initially set up a company in Chicago where they manufacture the drink. When the World War I erupted, soldiers who fought with the British Army brought the health drink in India.
Now, the significant chunk of Horlicks sales is coming from India under the management of GlaxoSmithKline Consumer Healthcare in which GSK holds 72.5 percent of the shares.
Horlicks is popularly known in the United Kingdom as a drink that can promote healthy sleep among adults and the elderly,
In India, however, Horlicks is most known as a nutritional supplement for children. At present, Horlicks holds about 44 percent of India's nutritional market. India as a whole is perceived currently as one among the rapidly emerging market for any industry.
Nestlé is perceived as the one "particularly well-suited" entity to buy Horlicks, Reuters reported citing information from people familiar with the forthcoming acquisition. Nestlé after all already owned Horlicks' competition, Milo which is another malt-base drink that has a significant market in India. More so, Nestlé has reportedly been had its eye on Horlicks for a few years now, the sources said.
With regard to Coca-Cola, if it wins the bid, the acquisition will add to its other multibillion-dollar deal involving the purchase of Costa Coffee for $5.1 billion in August. Coke, however, will face trust issues if it wins the bid over Nestlé and Unilever. The company is said to have already bid for Complan, a similar nutritional drink produced by Kraft Heinz according to a separate report from the Financial Times.
PepsiCo has yet to express interest over possible acquisitions but is closely monitoring the development, Financial Times reported.
People familiar with the bidding that is taking place said GSK will release a shortlist of bidders within the next two weeks. As of now, GSK has yet to consider any entity as its preferred buyer.
GSK has been reviewing Horlicks and some of its lines related to consumer healthcare nutrition products since March. According to Emma Walmsley, GSK's chief executive said the company is more inclined to focus on its over-the-counter drugs and oral health brands in India. The company has also been more engaged in its Indian market for pharmaceuticals and vaccines.
