Some of the biggest consumer companies across the globe have been eyeing on the nutrition business of GlaxoSmithKline and the competition has been intensifying for securing the expensive Horlicks malted drink product of the company. Amongst other products, malt-based drinks are considered as one of the largest health-food drink across India.
Nestle is pitted against Unilever in the final talk of negotiations for acquiring GSK’s Indian consumer nutrition business, which is inclusive of Horlicks malted drink product. Nestle has been taking the lead with a significantly huge offer by leaving Unilever behind and Coca-Cola being the third contender has been opted out. The winner will be launching an open offer for mopping up nearly 26% additional stake.
Earlier this year, GlaxoSmithKline had mentioned about a strategic review with regards to its nutrition business across the globe and this review is likely to conclude by 2018-end. The transaction is highly beneficial for the FMCG bounty hunters who are seeking for expansion opportunities in India.
Nestle India to Widen Malt Drink Product Portfolio
Nestle India has been selling malt drink Milo and is now seeking for expansion of its product portfolio with acquisition of Horlicks brand by GSK. This in turn helps the company in synergizing distribution of Milo by means of pharmacy channels. Growing demand from parents to fill the nutritional gaps of their children has influenced Nestle in firming up on Horlicks brand acquisition. Local manufacturers are ramping up on their product offerings in order to attract newcomers such as the Manpasand Beverages, a juice-drink maker.
GSK Introduces New Version of Horlicks
GlaxoSmithKline lately introduced a new version of Horlicks with addition of protein for competing in the explosion of ayurvedic products and energy drinks. GSK is strongly focusing on innovation and launch of sachets, which in turn would benefit in recouping growth. However, the decision of parent market to place Horlicks on block by carrying out the strategic analysis of its heavy investment in GSK of India is a threat.
GSK has been planning to continue making heavy investments for intensifying growth opportunities for its oral health and over-the-counter brands in India such as Eno and Sensodyne. The company has been constantly investing in vaccines and pharmaceutical businesses with development of new manufacturing plant in Vemgal, Karnataka. Understanding millennial preferences, employing new acquisition strategies and leveraging new packaging techniques is turning to be play an essential role in the competitive business world.