GlaxoSmithKline Plc (GSK) on Thursday sold its 5.7 per cent stake in FMCG major Hindustan Unilever Ltd (HUL) for Rs 25,480 crore. The GSK sale, at an average price of Rs 1,905 per share, is the largest secondary market trade on Indian stock exchanges.
“GSK has, through its subsidiaries GlaxoSmithKline Pte Ltd and Horlicks Ltd, today agreed to the sale of 133,772,044 ordinary shares in HUL at a volume-weighted average price of approximately Rs 1,905 per share, raising gross proceeds of approximately Rs 25,480 crore,” GSK said.
After the transaction, GSK will not hold any HUL shares. The names of the buyers were not immediately known. Glaxo acquired the stake in HUL after the former sold its consumer nutrition business, including brands like Horlicks and Boost, to HUL.
In December 2018, Hindustan Unilever approved a scheme of amalgamation between the company and GlaxoSmithKline Consumer Healthcare Ltd (GSK CH India). The transaction was an all equity merger with 4.39 shares of HUL being allotted for every share in GSK CH India. This transaction valued the total business at Rs 31,700 crore.
“When GSK originally announced the divestment of Horlicks in December 2018, the company expected gross proceeds from the overall transaction to be approximately 3.1 billion pounds and net proceeds to be approximately 2.4 billion pound after hedging costs, taxes and other expenses had been settled,” GSK said in an exchange filing in London.
“With the appreciation of HUL’s share price since then, GSK now expects gross proceeds from the divestment to be 3.4 billion pounds and net proceeds from the divestment to be 2.9 billion pound,” it said. This includes the proceeds received on closing of the transaction on April 1, 2020 and the expected proceeds from the sale of our Bangladesh business, which is expected to close later this year, GSK added.
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