Coca-Cola tipped to bid for GSK's Horlicks brand

Coca-Cola has plans to bid for GlaxoSmithKline's (GSK) Indian beverage company, Horlicks for an estimated US$3.9billion, Sunday Telegraph reported. According to the paper's sources, the first round of bids will be launching as the beverage giant makes preparations for the deal.

Coca-Cola is not the only company eyeing the Indian malt beverage, with other companies such as Kellogg, Unilever, The Kraft Heinz and Nestle, to a name a few, also reportedly to have "registered interest" in Horlicks, the article added.

GSK first announced a strategic review of Horlicks and other products earlier this year in March. This was in a bid to fund its stake in consumer healthcare joint venture. According to its most recent financial results, the company's nutrition sales declined 7% at an annual equivalent rate, but grew 1% at a coupon equivalent rate to £154 million.

The company's nutrition business in India continued to perform strongly, benefiting from new products including Horlicks Protein+ which was launched earlier in the year. Internationally, the group garnered a revenue of £827 million, with a 2% decline in growth.

“With the recent new product launches, development of the new R&D approach and the successful buyout of the consumer business, we have evaluated the group’s cost base and what is required to deliver competitive long-term growth and performance in each of the group’s three businesses," Emma Walmsley, CEO, GSK said.

According to the financial release, GSK is also implementing a new major restructuring programme, which aims to significantly improve the competitiveness and efficiency of the group’s cost base with savings delivered primarily through supply chain optimisation and reductions in administrative costs.

Marketing has reached out to GSK and Coca-Cola for statement.

Coca-Cola's interest in Horlicks comes a week after it acquired Costa Coffee for a value of US$5.1 billion. This move was aimed to give Coca-Cola a “strong coffee platform” across parts of Europe, Asia Pacific, the Middle East and Africa and its press statement read that opportunity for additional expansion is also available.

The move comes as Coca-Cola eyes a more a “scalable” coffee platform with critical know-how and expertise in a fast-growing, on-trend category. The move also expanded Coca-Cola’s existing coffee line up, which currently includes Japanese coffee brand Georgia.