GlaxoSmithKline Announces 'Strategic Review' Of Horlicks Brand

By Steve Wynne-Jones
Share this article
GlaxoSmithKline Announces 'Strategic Review' Of Horlicks Brand

GlaxoSmithKline is to undertake a 'strategic review' of its Horlicks brand, as well as its other consumer healthcare nutrition products, to support funding for the purchase of Novartis' stake in a Consumer Healthcare Joint Venture.

GSK said that it has reached agreement with Novartis for the 36.5% stake, which is valued at $13 billion.

The Consumer Healthcare Joint Venture was formed as part of a three-part transaction between GSK and Novartis, which was approved by shareholders in 2014.

GSK said that its strategic review of Horlicks and other brands is also being carried out to drive increased focus on the group's OTC and Oral Health categories.

Combined sales of Horlicks and other related brands were approximately £550 million in 2017.


India Presence

'The majority of Horlicks and other nutrition products sales are generated in India, with the Horlicks range widely recognised as a portfolio of premium nutrition products,' the company said.

In addition, GSK's India division trades on both the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) in the country.

It said that regardless of the strategic review, India remains a 'priority market for GSK investment and growth'.

GSK expects the outcome of the strategic review to be concluded around end-2018.


Capital Allocation

“The proposed transaction addresses one of our key capital allocation priorities and will allow GSK shareholders to capture the full value of one of the world’s leading Consumer Healthcare businesses," said Emma Walmsley, GSK chief executive.

"For the Group, the transaction is expected to benefit adjusted earnings and cash flows, helping us accelerate efforts to improve performance. Most importantly, it also removes uncertainty and allows us to plan use of our capital for other priorities, especially pharmaceuticals R&D.”

Last year, GSK’s Consumer Healthcare business reported sales of £7.8 billion.

‘As a result of the transaction, GSK’s shareholders will capture the full value of GSK’s Consumer Healthcare growth,’ the company said. ‘With category-leading Power Brands, increased focus on science-based innovation and improved operational efficiencies, GSK Consumer Healthcare is well positioned to deliver sales growth, operating margin improvements and attractive returns.’

© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.

Get the week's top grocery retail news

The most important stories from European grocery retail direct to your inbox every Thursday

Processing your request...

Thanks! please check your email to confirm your subscription.

By signing up you are agreeing to our terms & conditions and privacy policy. You can unsubscribe at any time.