ULVR Horlicks Acquisition "Very Rich", say Analysts

Unilever has paid too much for GSK's health food drinks portfolio, say Morningstar equity analysts - and news of CEO Paul Polman's retirement is "no surprise"

Philip Gorham 4 December, 2018 | 2:05PM
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Unilever announced the acquisition of GSK's health food drinks portfolio

Unilever (ULVR) announced the acquisition of GlaxoSmithKline's (GSK) health food drinks portfolio for €3.3 billion, payable primarily through its shares in its Indian subsidiary Hindustan Unilever, or HUL, as well as around €470 million in cash.

We think the deal is very rich, at a stated post synergy valuation of under 20 times enterprise value/earnings before tax, but the firm expects the acquisition to be accretive to return on invested capital by year four.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
GlaxoSmithKline PLC1,499.20 GBX3.98Rating
Unilever PLC3,895.84 GBX0.07Rating

About Author

Philip Gorham