Unilever to acquire Indian affiliate

Published: 21-May-2013
Finance

Under the deal, Unilever would acquire 487 million additional shares, representing 22.52% of the total capital.


Anglo-Dutch FMCG giant Unilever has offered INR293bn (€4.1bn) to buy 75% of its Indian affiliate Hindustan Unilever (HUL). The company already owns 52% of the affiliate.

The cosmetics and food markets are burgeoning in India. With the continued rise of a flourishing middle class, the move is said to mark “a new milestone in Unilever’s strategy to invest in emerging markets,” said Paul Polman, Unilever’s Executive Director.

Under the deal, Unilever would acquire 487 million additional shares, representing 22.52% of the total capital. The tender process will be launched in June at a price of INR600 per share – a premium of 20.6% over its recent closing price of INR497.

As news broke of the deal, HUL’s share price registered a 20% jump on the Bombay stock exchange. HUL also reported a surprise rise in net profits of 14.7% for the first three months of the year, to INR7.87bn.

The Anglo-Dutch group is number one in its sector in India and distributes its brands such as Fair and Lovely, Dove and Lux via a broad distribution network of supermarkets and retailers.

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