Leading FMCG player Hindustan Unilever on Monday announced the acquisition of female intimate hygiene wash brand VWash from homegrown pharma major Glenmark Pharmaceuticals for an undisclosed sum.
The deal would include an upfront cash payment and a deferred consideration over the next three years, Hindustan Unilever said in a statement, without disclosing the acquisition amount.
The two companies have entered into an agreement for the sale which they expect to complete in next few months, it said.
VWash was launched byGlenmarkin 2013 and has established itself as the market leader in the female intimate hygiene category, the statement noted.
The acquisition of VWash would help HUL have a larger play in the chemist channels as it is already getting brands as Horlicks, Boost, Sensodyne and Crocin from the acquisition of GSK Consumer and Healthcare Business, HUL Chief Financial Officer Srinivas Phatak said in a teleconference.
As product like this is useful for ecommerce prospects and from health and beauty prospect, he said, adding This is going to be a new category entry for us.
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Phatak also said that though the urban penetration of this product is very low, the company would use its vast distribution channels to increase its penetration.
Glenmark in a statement said as part of the divestment of VWash brand, the pharma company will sell the main brand and all other brand extensions.
Under this agreement, the brand and other trademarks, copyrights, know-how associated with VWash business will be transferred to HUL, it said.
While the statement did not disclose the deal value, it said Glenmark will receive an upfront payment (undisclosed) and royalty (undisclosed) on sales for three years.
The sale does not include the transfer of employees, Glenmark said, adding the transaction is expected to be completed in the next few months subject to customary approvals.
Glenmark launched VWash, a liquid vaginal wash, as an OTC product in 2013. The company continued to invest in building the brand and established it as a market leader in the intimate hygiene category.
Over the years, Glenmark launched multiple line extensions like VWash Wipes to expand the brand offering across different consumer needs.
The decision to divest VWash brand is driven by the strategy to focus on our core therapy areas. While we have been able to establish VWash as a category leader, we are confident that HUL's strong market presence and large distribution network will accelerate its growth further, said Sujesh Vasudevan, president for Glenmark's formulations division said.
Commenting on the development, HUL CMD Sanjiv Mehta said: The acquisition ofVWashgives us an entry into the currentlyunderpenetratedand rapidly growing female intimate hygiene segment. The brand has a leadership position and fits well into the white spaces in our Beauty & Personal Care business.
We look forward to completing the acquisition and strongly believeHULis well-positioned to further scale up this business, given the strength of our market development and distribution capabilities, he added.
The deal includes the acquisition of intellectual property rights including trademarks, design and know-how related to theVWashbrand.
Phatak said HUL is only buying the brand and the business and not acquire any manufacturing facility and take any employee as part of this transaction.
Glenmarkwill continue to manage the business until the transaction is completed, and will also continue to manufacture forHULfor an agreed period of time, the statement added.
The proposed acquisition is in line with HUL's strategic intent to enter fast-growing segments of the future in the premium Beauty & Personal care.
Glenmark said post divestment, it will strive to consolidate its position in the core therapy areas of respiratory, dermatology and oncology. Its OTC business will focus on its other leading brands like Candid Powder, Scalpe and also introduce new Rx to OTC switches.
Mumbai-based Glenmark is a global research-led pharma company with presence across generics, speciality and OTC business with operations in over 50 countries. Its key therapy focus areas include respiratory, dermatology and oncology.
The proposed acquisition is in line with HUL''s strategic intent to enter fast-growing segments of the future in the premium Beauty & Personal care.
Anglo-DutchFMCGgiant Unilever in December 2018 had announced the acquisition of health food portfolio, including popular brandsHorlicksand Boost, fromGSKCH Indiaand over 20 other markets for 3.1 billion pounds (about Rs 27,750 crore).
Under the deal, Unilever''s Indian arm, HUL is acquiring GSKCH India via an all-equity merger, valuing the total business of the latter at Rs 31,700 crore.