The share price of FMCG major Hindustan Unilever Ltd (HUL) jumped by over 8 per cent on Tuesday afternoon after the company signed an agreement with Glenmark Pharmaceuticals to acquire its intimate hygiene brand VWash.
"The deal includes the acquisition of intellectual property rights including trademarks, design and know-how related to the VWash brand," HUL said in a statement.
The consideration has been split into two parts involving an upfront cash payment upon closing of the deal and a deferred consideration over the next three years, it said.
The transaction is subject to fulfilment of certain conditions and both the companies are looking to seal the deal in the next few months.
"Glenmark 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," said the HUL statement.
VWash was launched by Glenmark in 2013 and the brand has established itself as a market leader in female intimate hygiene category.
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The acquisition is in line with HUL's strategic intent to enter fast-growing segments of the future in premium beauty and personal care category said Chairman and Managing Director Sanjiv Mehta.
"We strongly believe HUL is well-positioned to further scale up this business, given the strength of our market development and distribution capabilities," he said.
HUL is India's largest fast-moving consumer goods (FMCG) company with its products touching the lives of nine out of ten households in the country.
At 1 pm, HUL stock was trading 8.04 per cent higher on the National Stock Exchange at Rs 2,020 per unit.