GlaxoSmithKline’s Indian consumer health sale may just touch off a bidding war.
Major players including Danone, Hindustan Unilever and Nestlé are squaring off against private equity firm KKR to nab Glaxo's 72.5% stake in its Indian consumer products business, The Economic Times reported. PepsiCo, Abbott and Mondelez are reportedly in the mix, too.
The sale could drum up $4 billion, the India-based Times says, which could make it the biggest deal in consumer history there. And a major cash infusion is exactly what GlaxoSmithKline is looking for to help fund its own consumer buy: A $13 billion pickup of Novartis’ share in their consumer joint venture, agreed upon in March.
For some of the rumored bidders in India, such as Danone and Abbott, the Indian company—which markets well-known drink brands Horlicks and Boost—would fit right into their portfolios. KKR, though, could be a tough M&A rival: It’s one of the most aggressive PE investors in India, TET noted, and it’s been scouting for big-time assets in the country.
For now, talks are still in the early stages, the Times’ sources said. The process should pick up steam next month, after initial bids become formal, nonbinding offers and GSK pares down its list of suitors to continue negotiations.
GSK said it was weighing a sale of its share in GlaxoSmithKline Consumer Healthcare Ltd., which is a public company listed on India’s stock exchanges, at the same time it went public with the Novartis deal agreement. But as Glaxo was quick to point out, it’s still focused squarely on the Indian market with its other products.
India “remains a priority market for GSK investment and growth,” the pharma giant said at the time, adding that it would continue to back OTC and oral health brands in the country and invest in pharmaceuticals and vaccines there, too.