GLOBAL: Coca-Cola and Kraft Heinz, the US food and beverages groups, are reported to be serious contenders in an acquisition battle for Horlicks, the venerable British malted milk drink brand that has been on the shelves since 1873.
Currently owned by GlaxoSmithKline (GSK), the UK pharmaceuticals giant, it is understood that both companies have held early talks about a deal, according to sources who spoke to the Sunday Telegraph.
Other potential bidders include Nestlé, the Swiss FMCG group, which has expressed interest since GSK announced in March that it would conduct a strategic review of the Horlicks brand – plus a range of its other nutrition products – in order to focus more on the pharmaceutical side of its business.
“This is an absolutely extraordinary brand, with more than a century of history, particularly in India – [where it is] much loved,” said GSK CEO Emma Walmsley at the time.
Horlicks is 145 years old and dates back to when British-born brothers James and William Horlick founded a company in Chicago to manufacture the drink. In 1908, they opened a factory in Slough, in southern England, and Horlicks gained popularity as a non-perishable and high-calorie food supplement.
British and American soldiers and airmen used Horlicks tablets during the Second World War, while Indian troops took the malted drink back to India after the First World War where it has remained a top consumer brand at the same time as it fell out of favour in the UK.
Horlicks is sold in India through GlaxoSmithKline Consumer Healthcare, an Indian-listed company in which GSK owns a 72.5% share.
According to the Telegraph, it is understood that any sale is likely to include GSK’s stake in that company, which is thought to be valued at about £2.5bn.
If Coca-Cola were to put in an offer, which would have to be approved by GSK’s shareholders, then the Horlicks brand would end up sitting in the same product category as Dr Pepper, Fanta, Lilt and Oasis.
It would also broaden Coca-Cola’s range of drinks to Indian consumers, especially in a market where the company has been making well-publicised efforts to offer healthier options than fizzy drinks.
Sourced from Sunday Telegraph; additional content by WARC staff