HUL To Acquire VWash From Glenmark Pharma

Hindustan Unilever Ltd. agreed to acquire an intimate feminine hygiene brand from Glenmark Pharmaceuticals Ltd. as part of its plan to enter fast-growing segments of the future in the premium beauty and personal care category.

The deal includes acquisition of intellectual property rights, including trademarks, design and know-how related to the VWash brand, the nation's largest consumer goods maker said in a statement. HUL will make most of the payment in cash upfront as well as pay a royalty on sales for three years. The companies, however, haven't disclosed the amount of the deal.

The transaction is subject to fulfilment of certain conditions and both companies would be working together to complete this in the next few months, the statement said. Glenmark, however, will continue to manage the business until the transaction is completed, and will also continue to manufacture for HUL for an agreed period of time.

“The acquisition of VWash gives us an entry into the currently underpenetrated and rapidly growing female intimate hygiene segment,” Sanjiv Mehta, chairman and managing director of HUL, said in the statement. “The brand has a leadership position and fits well into the white spaces in our beauty and personal care business.”

The company is also well positioned to further scale up this business, Mehta said, given the strength of its market development and distribution capabilities.

Srinivas Phatak, chief financial officer of HUL, said on a conference call that the health and beauty, e-commerce and modern trade channels are again growth channels.

The acquisition of VWash and Glaxo Smithkline Consumer Healthcare's health-food drinks business and distribution of its over-the-counter products on behalf of GSK, Phatak said, will give HUL better presence in the health and beauty and chemist channels.

According to Glenmark, the decision to divest VWash brand is in line with the drugmaker's strategy to focus on its core therapy areas. Glenmark's over-the-counter business will now focus on its other leading brands like Candid Powder (for skin infection), Scalpe (anti-dandruff shampoo) and introduce new Rx to OTC switches, the drugmaker said in a press statement.

Glenmark's consumer care business is driven by its three major brands operating in the consumer space—Candid Powder, VWash Plus and Scalpe. Its consumer business reported revenue worth Rs 190 crore for financial year ended March 2019, while the VWash franchise alone grew by 48 percent year-on-year during the period, according to its annual report.

VWash Plus continues to hold leading position in its category with more than 50 percent market share, Glenmark said in its annual report, citing information from IQVIA, the healthcare data and analytics provider.