Paul Polman Tops Nestle by $1 Billion in Swansong Horlicks Bid
(Bloomberg) -- Unilever's departing Chief Executive Officer Paul Polman, in a major push into India that may be his last deal, agreed to pay about $1 billion more than his closest rival for GlaxoSmithKline Plc's consumer business in the country, according to people familiar with the matter.
The Anglo-Dutch conglomerate agreed to pay 3.3 billion euros ($3.8 billion) in cash and stock from its Indian subsidiary to take control of the consumer business, including malted milk drink Horlicks. Nestle SA's offer was lower, but was all cash, the people said, asking not to be identified because the details aren't public. One of Polman's last acts as CEO will be attending a capital markets day in India with the rest of his executive team this week.
To read more about the deal's structure, click here.
Graeme Pitkethly, the Anglo-Dutch company's chief financial officer, said comparisons were difficult because of the way the offers were structured.
“I hate to speculate, but I very much doubt” that Unilever outbid Nestle by $1 billion, he said Tuesday at the investor day in Mumbai. Representatives for Glaxo and Nestle declined to comment.
Monday's deal may help ensure Polman's final move as CEO isn't dealing with fallout from a disastrous decision to move Unilever's headquarters out of the U.K. in favor of a single base in the Netherlands -- a change he'd hoped would enable more deals. He was forced to abandon the plan in October after shareholders rebelled.
Under Polman, Unilever thwarted a takeover bid from U.S. rival Kraft Heinz Co. in 2017 and sold its spreads business to private equity firm KKR & Co. for $8.1 billion later in the year. The India deal is the company's third-largest purchase since he took over in 2009, data compiled by Bloomberg show.
Unilever's high price may have been needed to convince Glaxo to accept an offer that wasn't all cash. When Glaxo announced that it was reviewing the business in March, the firm said it wanted to use the proceeds to fund a buyout of its joint venture with Novartis AG, implying that offers needed to provide the British business with ready money.
--With assistance from Corinne Gretler, James Paton and Thomas Buckley.
To contact the reporter on this story: Ruth David in London at rdavid9@bloomberg.net
To contact the editors responsible for this story: Daniel Hauck at dhauck1@bloomberg.net, Amy Thomson, Eric Pfanner
©2018 Bloomberg L.P.
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