Mumbai: According to the reports of The Economic Times, Coca Cola company is set to join the race to buy GlaxoSmithKline’s (GSK) consumer nutrition business along with other contenders Nestle, Danone and Hindustan Unilever to acquire the product line-up that includes Horlicks, Boost, Maltova and others. Apparently, Coke has reportedly mandated Citi to help them in the competitive bidding process that is expected to begin shortly.
“The evaluation work had begun even though the sale process is yet to formally launch. It will be a large transaction, so work has already begun,” said an official, adding that “This also marks the company’s return to big bang M&A in a market like India.”
Earlier, the Britain’s biggest drugs company, GSK, had announced in a statement that it “is initiating a strategic review of Horlicks and its other consumer healthcare nutrition products” to fund its $13-billion buyout of Novartis’ stake in their Consumer Healthcare Joint Venture. The company had said that its 72.5 per cent stake in (GSKCH), which is the category leader in Indian health food drinks industry, would also be a part of the strategic review.
The combined sales of Horlicks and GSKCH’s other nutrition products were pegged at approximately 550 million pounds in 2017, a majority of which was generated in India. Moreover, the Horlicks and Boost brands have reportedly cornered a 70 per cent share of the domestic Malted Food Drinks (MFD) market.
In the early 1990s Coca Cola had acquired popular Thums Up from Parle and gained access to its nationwide bottling and distribution infrastructure. The changing consumer preference for healthier beverages over fizzy drinks is reported to be one of the main reason for Coca Cola trying to grab a foothold in the nutrition space.
In recent years Coca-Cola has acquired or invested in several millennial-friendly brands such as Honest Tea, organic tea brand Suja Life, a cold-pressed juice maker, and on soya-based beverage brand AdeS.