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LONDON (Alliance News) - GlaxoSmithKline PLC on Thursday confirmed that it is considering a merger transaction for its Horlicks nutritional drinks brand and other consumer healthcare nutrition products.
The company did not name the party related to the transaction but said that "consideration is being given to a potential transaction that includes a merger of GlaxoSmithKline Consumer Healthcare Ltd", its Indian subsidiary in which it holds a 72.5% stake.
The unit generates the majority of Horlicks and other 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," Glaxo said.
On Tuesday, the Financial Times reported that GlaxoSmithKline has entered into exclusive negotiations to sell its nutrition business to Unilever PLC. According to the newspaper, Glaxo's Indian business, which is listed on the Bombay Stock Exchange, has a market value of USD4.2 billion.
Back in March, the FTSE 100-listed pharmaceutical company said it would initiate a strategic review of Horlicks and other consumer nutrition products, including the company's shareholding in GlaxoSmithKline Consumer Healthcare. The review was initiated after Glaxo agreed to buyout Novartis AG's stake in the two companies' consumer health joint venture for USD13.00 billion.
Shares in the Glaxo were trading up 0.6% at 1,596.12 pence each. Unilever shares were trading 0.4% lower at 4,240.00p each.